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A Lesson from the Pilgrims

We hope that you can count good health and prosperity as among your greatest blessings in this inflationary year.  Will are grateful for you and all of our friends and clients in 2022.  

Among our Thanksgiving traditions, right along with turkey, family, and even football, is a story we like to tell each year, a story of our country’s founding with a moral that we hope is able to remain a part of the American national character, one remembered each Thanksgiving. 

It comes from the history of the Pilgrims, who arrived on the Mayflower and settled at Plymouth in 1620 in pursuit of religious freedom. 

Within five months of landing, half the company had died of sickness and starvation. 

The sponsors of the enterprise had insisted that for the first seven years the colony would have “all things in common.” This communal organization, socialism by another name, exacerbated the settlement’s woes. 

The pilgrim’s governor, William Bradford wrote that men complained about working for other men’s wives and children without being compensated while the wives thought it a form of slavery “to be commanded to do service for other men, as dressing their meat, washing their clothes, etc.; they deemed it a kind of slavery, neither could many husbands well brook it.” 

Altogether the experience of communal property “was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort.”

Eventually, it was decided, wrote Bradford, that each family would be assigned its own parcel of land so “that they should set corn every man for his own particular, and in that regard trust to themselves.” 

The success of the new arrangement was predictable. 

After one year Bradford reported,

“This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been. . . . The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.”

The Pilgrims had their religious freedom, but prosperity wasn’t part of their experience until they had economic freedom as well.  In experimenting with collectivized economic organization, they discovered what everybody owns, nobody owns. 

It’s a lesson that mankind has had to learn and relearn after many bitter experiences, from the “starving times” of the pilgrims to the millions of deaths from Stalin’s terror famine in Ukraine, to many millions more deaths from the collectivized farming under Mao Tse-tung in China.  

The result of enforced collective ownership, socialized, or what is often called public ownership, is waste, neglect, and overuse.  

What everybody owns, nobody owns.  This year has seen the advance of collectivization in our national life, the sort of policies that decimated the Pilgrims.  We are among many who see the spread of this philosophy at breakneck speed over the last two years.  It is evident on many fronts but especially seen in the relentless assault on American property rights and in the expansion of the state and its spending.  We hope the new year sees this trend reverse.  

In the meantime, we are grateful for your business and friendship!  Here’s to a free and prosperous America!  Happy Thanksgiving to you and your loved ones!


Move to Gold Ahead of Global De-Dollarization

There is more movement afoot in the US dollar’s global status.   But first, the backstory:

The US emerged from World War II as a mightier powerhouse than ever.  Other leading industrial economies lay in ruins, but not the US.  The US dollar was said to be as good as gold.  Because foreign governments, many of whom were dependent on US aid for rebuilding, seemed to believe it, they bought into the Bretton Woods international agreement to hold dollars instead of gold as their own reserves.

But that was now a long time ago.  In the meantime, as Nixon’s Treasury secretary announced to the world, “The dollar is our currency, but it is your problem.”

It is true.  The dollar is their problem.  It is a growing problem.  Those that are dependent on their dollar reserves see the handwriting on the wall.  If the US can print trillions of dollars in just a few years, the dollar is no place to park its reserves.

And so many of them are moving their central bank holdings away from dollars and into the safety of gold.  We have described this as the most important monetary megatrend of our time.

Three years ago, in a commentary called De-Dollarization: The Global Monetary Mega-Trend, we wrote:

First, if one central bank decides to upgrade its reserves with the world’s most enduring money, it may only represent a political statement.  It is perfectly understandable if a heavily sanctioned state like Iran or Venezuela decides to avoid dollars for political reasons.  (Note, though, that US sanctions have proliferated to so many countries that the US is forcing the world’s turn to dollar alternatives.)

But those jumping on the gold-bandwagon include friendly countries like Hungary and Poland.  Most recently Poland has been ratcheting up its gold reserves, purchasing 125 metric tons over the past two years.  At the same time Poland is repatriating gold.  This week Poland announced that it has brought home to Warsaw 1oo tons of gold that had been held on its behalf by the Bank of England.  This is not a sign of long-term confidence in the post-war dollar reserve monetary order.

Ten years ago, China held more than $1.3 trillion of US debt.  Now its holdings have slipped below $1 trillion to $933 billion.  

But China is not the only country dumping US treasury debt. 

In November 2021, Japan held $1.33 trillion of US treasury debt.  Now, just a year later, it has dumped almost 16 percent of that portfolio.

It is an open secret in the capital markets that the Treasury is having liquidity challenges.  Foreign holders, friends and foes alike, are backing away.  And even the Fed itself, has pivoted from buying US debt to unhoarding its holdings.

This is not good for the US dollar.  It is not good for the US economy, because at some point the treasury will have to offer much higher interest rates to attract buyers for its voracious borrowing.  Along the way, the Fed will try to ease conditions and rates by printing more money.

That’s what it always does.  

It will make gold move much, much higher.  Move to gold now as the megatrend gathers momentum.


Here Comes the Silver Shortage

With the US Mint and other suppliers woefully behind on minting silver coins, coupled with high premiums on popular silver investment products, no one could possibly feel blindsided to hear research reports reveal a developing silver shortage.

Net jewelry and physical investment silver demand will finish 2022 50 million ounces higher than last year, according to a newly released report from The Silver Institute, a non-profit international research and trade association.  

The report attributes the surge to “investor fears of high inflation, the Russia-Ukraine war, recessionary concerns, mistrust in government, and buying on price dips.”

silver bars

Total 2022 global silver demand is expected to climb 16 percent from 2021 for a new record high of 1.21 billion ounces.

Silver mining output is only expected to increase by 1 percent for the current year to a total of 830 million ounces. High inflation, particularly oil and natural gas prices have been a factor in mine production.

Altogether The Silver Institute projects a record silver deficit this year of 194 million ounces.  That would be four times the deficit experienced in 2021 and result in two consecutive years of silver deficit.

The report cites three specifics contributing substantially to surging demand:

Industrial demand is on course to grow to 539 million ounces. Developments such as ongoing vehicle electrification (despite sluggish vehicle sales), growing adoption of 5G technologies and government commitments to green infrastructure will have industrial demand overcome macro-economic headwinds and weaker consumer electronics demand.

Silver jewelry and silverware are set to surge by 29 percent and 72 percent respectively to 235 million ounces and 73 million ounces this year, mainly thanks to an unprecedented rebound in Indian demand. This has partly been driven by strong inventory replenishment ahead of the festive and wedding season, following heavy stock depletion in 2021.

Additional details are available at The Silver Institute.


Double-Digit Price Hikes Slam Phoenix Again

Consumer prices climbed 7.7 percent during the 12 months through October, according to the Labor Department.

While administration officials celebrate the October report because it was down from the 8.2 percent rate reported a month earlier, residents of the Phoenix metropolitan area- where Republic Monetary Exchange is located- had no reason for celebration.  That is because consumer prices continued to climb at double-digit rates for Phoenicians.

The Phoenix metro Consumer Price Index for the 12-month period clocked in a 12.1 percent.  

Meanwhile, the technical picture for gold and silver prices has turned bullish.  Gold displayed a breakout above its lows just above $1,630 that were touched just briefly in the prior three months.

Gold has now moved decisively above its 50-day moving average (the blue trend line), and may be preparing an assault on the 200-day moving average (the red trend line), currently just over $1,800.  

Silver has also moved well above its 50-day moving average and has now penetrated its 200-day moving average as well.

Keep current on this volatile economy.  Speak with a Republic Monetary Exchange gold and silver professional and create a sensible plan to protect your wealth and your family.


Ready for Hyperinflation?

Inflation is bad enough.  But hyperinflation is something else again.  It is the ruin of entire nations and cultures.  Now at least one credible observer says hyperinflation is on its way.

Time to get ready!

Paul Singer is the founder and president of Elliot Management which the Financial Times calls a “prominent” asset manager.  That’s one way to describe it.  It is one of the largest asset managers around, responsible for some $56 billion. 

In a private letter to their clients, Singer and Elliot Management are warning that the world is “on the path to hyperinflation.”  This could lead to “global societal collapse and civil or international strife”.

They are advising clients who have already experienced the stagflation of the 1970s, the dot com and housing bubbles collapse, not to think they have seen everything, but warn of “frightening and seriously negative possibilities” and a “seriously adverse unwind of the everything bubble.” 

So, what is hyperinflation?   Well, it is just what the name implies.  It is a lot of inflation!

People who write and talk about these things try to come up with a fixed inflation rate to qualify as hyper.  But those definitions are wholly arbitrary.  Measuring inflation is a sketchy challenge anyway, with criteria that are constantly changing.  We have consumer price inflation, core inflation, producer price inflation, personal consumption index, and the core personal consumption index.  And so it goes.

We think the best way to describe hyperinflation is that it is the point at which the public finally concludes that it isn’t simply a matter of prices going up, but rather that it is the currency itself that is losing value.  That’s when the Crack-Up Boom hits.

The Crack-Up Boom is the evocative name offered by the late economist Ludwig von Mises for that moment: 

If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the ‘twenties, called flight into real goods or crack-up boom.

You don’t want to be holding dollars when the Crack-Up Boom hits.  You want to own gold and silver.  

Singer and the firm are explicit that their warning is for “a set of outcomes that would be at or beyond the boundaries of the entire post-WWII period.”  To blame for the state of affairs, says the client advisory, are policymakers who have been “dishonest” about the real cause behind rising inflation, and of not taken responsibility for the part central banks played in creating it.

We would not have said it much differently.  For more information, speak with a Republic Monetary Exchange gold and silver professional today.  You don’t want to be holding dollars when the crack-up boom arrives.


More Bidenflation

Is there any doubt that the surge in Washington spending is instrumental in the surge in consumer prices?

If there are any doubters, the folks at the Committee to Unleash Prosperity have provided a graphic to make it more clear.

It charts cumulative new spending beginning in December 2020, after Biden’s election. It begins with a $900 billion COVID package that President Trump and Speaker Pelosi agreed to that month.   And it just keeps stacking up from there.  As you can see from the yellow bars, the cumulative spending increases now total $4.5 trillion.

That’s a lot of new spending.  

Meanwhile, the blue line tracks the Consumer Price Increases over the same period.  The CPI was running below 2 percent when Biden came into office.  Soon it had climbed to 5 percent, and then month after month over 8 percent.

As Stephen Moore writes, “The latest White House spin is that inflation isn’t their fault. It’s just an act of nature or something like that.  But Bidenflation didn’t happen as the natural course of events.  Stop us if you’ve heard this many times before on these pages, but inflation sprang to life when the multi-trillions of ‘stimulus’ money drenched the economy.” 

We don’t think a lot more convincing is needed.  By the way, unhinged spending is not limited to the US.  It is a global phenomenon and so is high inflation.

And with that in mind, we repeat our previous report that central banks bought 399 tons of gold in the third quarter this year, almost double the previous record gold purchases.  And when they buy gold, remember that they are doing so in preference to holding US dollars.  

We think they are on to something.


Will Powell Save the Dollar?

Don’t bet on it!

It doesn’t take long to ruin a currency.  A little run of double-digit inflation soon has people looking for a better store of wealth.

Like gold and silver.

Look no further than at the other central banks of the world.  They know the money-printing game as well as Federal Reserve officials in the US do.  They run the exact same scam on their own citizen.  Take a look at inflation rates in a few other countries:


And those aren’t even the banana republics.  Those are what are thought of as the Western bloc nations (yes, including Japan).  The inflation rate in Turkey is 83 percent.  That’s the highest among the G20 nations.  We can’t even be bothered to keep up with the inflation rate in Venezuela.  It was somewhere around 120,000 percent, but last year it issued a new currency after knocking six zeros off the old one.  So now it may have an inflation rate of 120 percent.  But who knows?

It is because central bankers everywhere from Argentina to Zimbabwe know the money printing game so well – they run the scam on their own people all the time – it is because they know the game themselves that they don’t want to be victimized by us running it on them.

Which is why there is an international movement away from the US dollar.  Central banks bought 399 tons of gold in the third quarter this year according to the World Gold Council.  That’s almost double the previous record gold purchases.  

But isn’t Powell serious this time about wringing inflation out of our monetary system?  Well, first of all, he has no intention of ending the practice.  He simply wants to destroy the dollar’s purchasing power at a fixed and sustained rate.  (By the way, we don’t mind predicting here that the Fed’s target rate for inflation will probably be raised from 2 percent annually to somewhere around 4 percent annually.  That will help devalue the otherwise unpayable US national debt.)

Think about it this way.  It has been eight months since the Fed saw the light and realized that inflation wasn’t transitory.  It’s been eight months since the Fed began raising interest rates.  And it has been eight months of Hamlet-like soliloquies and halfway measures from Powell.  But inflation rages, nonetheless.

Indeed, Powell’s record of money-printing puts all the prior Fed chairmen to shame, as David Stockman describes:

When Powell was sworn in as Fed Chairman in January 2018, the Fed’s balance sheet stood at $4.439 trillion, the work of 15 chairmen over 104 years.

When he finally blinked in March 2022 and began to reluctantly raise rates from the zero-bound where they had been hideously impaled, the balance sheet stood at $8.937 trillion.

So the math of it speaks a thousand words. The gain during Powell’s first 50-months was $4.298 trillion, a figure larger than the money-printing total of all of his predecessors combined!

It makes no more sense to think that the chairman who oversaw a lightning-like doubling of the Fed’s balance sheet will now get it all under control than it does to believe that the wolf who has been raiding the henhouse has suddenly become a vegetarian. 

It doesn’t take long to ruin a currency.  That is why central banks are selling dollars at today’s highs to buy gold at today’s bargain prices.

We recommend you do likewise.  To learn more, speak with a Republic Monetary Exchange gold and silver professional today.


The Fed Sows Confusion, Chaos

Mixed Messages Mess with Markets!

It seems strange that the mighty capitalist markets should be constantly waiting for the next pronouncement of a small, grey band of mostly unknown bureaucrats, most of whom – if not all – showing little evidence of having created any wealth in their own lives, sitting around conference tables in the Marriner Eccles building in Washington, to issue diktats about where interest rates must be.

But we go through this several times each year.  And now we have just gone through it again.  The Federal Reserve Open Market Committee met in the first two days of November, a meeting culminating with the announcement that it had decided to raise its influential policy rate, the Fed funds rate, by 0.75 percent effective immediately.

This is the latest in a series of Fed rate hikes that began in March when the central bankers finally and reluctantly confessed that inflation was not, after all, transitory, effectively confessing as well that they didn’t understand inflation or really know what they were doing.  So, they began hiking rates: 0.25 percent in March, 0.50 percent in May, and 0.75 percent in June, July, and September.

And now once again in November.  The target range now for this Fed policy rate is 3.75 to 4.00 percent effective immediately.

Wall Street – both debt (bond) and equity (stock) markets – follow this action as a matter of life and death.  They know that by driving rates lower (by inflating the currency or money supply) for decades, the Fed’s manipulations were stove-piping money their way. 

Oh, life was good.  Very good.   

But inflation having risen and begun to irritate the people, the Fed finally fell under some pressure to get it back down.  This terrifies Wall Street which understandably doesn’t want to see its good thing come to an end.  So, the Fed’s pronouncements are a very big deal.  Wall Street watches for the least sign the blasted rate hikes will stop and that their happy days of free printing-press money will soon return.

The Fed concludes its meetings, issues a statement about its latest decision, and then shortly after the chairman, Jerome Powell answers the questions of a sycophantic corps of journalists assigned to the Fed beat.

We assigned a hapless member of our crew to follow the action on Wednesday and this is what he reported on the sequence of events. 

On the release of the Fed statement, he watched in real-time as all the markets moved up.  The real-time charts on CNBC were all awash in green.  That is because the Fed’s statement read in part, “In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”  That was all it took.  It must mean that the Fed was going to slow down its hikes, maybe before long stopping altogether, and even begin easing again.  

The markets were exuberant.  The Dow was up over 400 points.  And when Powell took to the podium, they remained that way.  

Until…

Until Powell spoiled the party, saying that they will continue “to look for compelling evidence that inflation is coming down.”  Uh oh!  Because there is no such compelling evidence to be found.  Powell even went on to say, “Another unusually large [rate] increase could be appropriate at our next meeting.”

Well!  That wasn’t supposed to happen.  And with that short observation, the markets turned as one.  They went south.  Euphoria left the room.  The buzz was killed.  All the lines on all the charts turned red, the color of red ink.  

After the markets closed, the Wall Street Journal swept up the debris with this headline:

Stocks Sink After Powell Signals Need for More Rate Rises

Fed chairman says rates will likely need to end higher than anticipated

So, by the end of the day, the Dow was down 500 points, the Nasdaq fell 366, and the S&P500 was off almost 100 points.

Not quite what Wall Street hoped.  

Just another day in the fiat money and fake interest rate economy.  As for ourselves, we think interest rates should be determined by real conditions of capital supply and demand.  That would prevent distortions and malinvestment and the constant booming and busting cycles in our economy by artificially jiggering rates.

And we think gold is real money.  Since it is real and can’t be printed, there is no need for the central banking apparatus that has spent more than a century destroying the dollar and bailing out its cronies.  

But that’s just us.


Biden, Biden, Biden!

When the truth takes a backseat!

It is one thing, and a very sad one indeed, to see anyone addled and losing their ability to think clearly.  But it is more than sad when the affected person’s inability is felt in the realm of policy and in our civic life.

It is a danger.  

President Biden’s confusion has gone far beyond fodder for cable news commentators.  And it seems that his befuddlement is compounded by even the written remarks his staff prepare for him, because they have developed a supreme and wanton indifference to the truth of the things they write for him to say.

Stephen Moore writes that at a recent stop on the campaign trail in New York, Biden took credit for the gas price dropping to $3.39 a gallon.  That is “down from over $5 when I took office,” said the President.

Not even close.  Moore points out that when Biden was inaugurated, the average gas price was $2.42.  And even as Biden spoke the price of gas was 10 percent higher than he said.  

Then Biden went on to explain that $7 gasoline “has always been the case in California.”

Again, not even close.  Sure, gas briefly hit $7 in Beverly Hills and in a couple of other spots, but in simply has not “always been the case.”  

Actually, the salient feature of this California retail gas price chart is that gas prices began their relentless climb shortly after Biden’s inauguration.  That’s no surprise.  Biden cancelled the Keystone Pipeline on his inauguration day.  Seriously.  On inauguration day.  

The President also recently came up with this one:  “Today, my administration announced that this year the deficit fell by $1.4 trillion — the largest one-year drop in American history.”

We’ll let Moore respond to that one:

“Joe Biden has spent and borrowed more money in his first twenty months in the White House than any other president in history. He’s already increased spending over the next 10 years by well over $4 trillion.  

“We went back and looked at what the Congressional Budget Office baseline was the month Biden left office and compared that to Biden’s fiscal results so far.  The first chart below shows he has ALREADY added just shy of $900 billion to the amount the feds would have spent and borrowed if he had simply done nothing.”

There are so many more.  Remember the one about the economy having “zero percent inflation in July… Zero percent!”  

C’mon man!

You can see the work of a clueless staffer who sent a clueless man out to meet the press with that one.

We don’t intend to go any further.  We are not going to curate Biden’s material misstatements of economic reality.  But if someone wants to, fine.  It’s a growth industry!  There’s room for everyone!

As for us, we prefer to insulate ourselves from the foolish and fraudulent in Washington.  That’s why we own gold.  And why we recommend that you do, too.  

Speak with a Republic Monetary Affairs gold and silver professional today.  


Halloween Prices are Scary

In covering inflation it is almost expected that we report on the cost of the traditional Thanksgiving dinner.   And we probably will in a month or so.

But we just happened to notice the rising cost of Halloween candy.  This year it is up by an unlucky 13 percent.  

Consumer prices in the Phoenix area just happen to have risen 13 percent over the past year as well.  It’s our bad luck here that that is the fastest inflation rate in the entire nation.

The Labor Department says that this year’s increase in candy is the largest ever.  According to the Wall Street Journal, it boils down to “surging labor costs and skyrocketing flour and sugar prices.”

The National Retail Federation says that the average household will spend about $100 on Halloween items this year.  That includes candy, decorations, and even costumes.  In 2015, that amount was only $74.

But back to candy. “Starburst and Skittles have had the biggest price increases—35 and 42 percent, respectively, since last year, reports the Journal.  “Crunch and Butterfinger bars saw the lowest price increases of 6 and 7 percent respectively.”

But the worst trick in buying a treat is the incredible shrinking candy bar.  That is the one that keeps getting smaller each year, but is packaged with a lot of cardboard to make it appear the same size as before.  

So, what explains it all?  Whatever did happen to the nickel candy bar?  

We think you know the answer.  It’s not that candy has gone up in price so much as it is that the dollar is losing purchasing power.

The chart above shows the decline in dollar purchasing power since the US severed the thin link of the currency to gold in 1971.  The dollar has been down ever since, and it is not going up.

And that is why people buy gold!


Inflation on Display

The US 12-month inflation rate as measured by the Consumer Price Index has been over 8 percent for 7 months in a row, since last March.  It has been raging along over 5 percent for 14 months in a row.

The pain is not evenly distributed across the county.  As you can see in the following graphic, inflation has hit hardest in the Mountain West region and in the West South-Central region.

The highest inflation rate by far has been in the Phoenix Metropolitan area.  Their consumer prices have risen at a 13 percent annual rate.  The next closest is the Atlanta metro at 11.7 percent, followed by the Miami and Tampa regions and Baltimore, which are registering double-digit inflation rates.

To round out the picture here is a breakdown of the increase in food and other costs over the past 12 months.  You will note the home heating oil is show the greatest price increase of all the items, just in time for the high-demand winter months.

And finally, we think it is time to include one of the most revealing graphs of this era.  It is a long-term trend chart showing the gold price against the declining purchasing power of the US dollar. 

For more information about adding gold and silver to your wealth preservation and profit strategy, speak with a Republic Monetary Exchange specialist today.


Why Are Americans So Down on the Economy?

The New York Times Has to Ask!

A recent New York Times “think piece” (that’s what they call them!) asks why Americans are so down on the economy.  

Seriously?

One easily wearies of the Times tendentious and partisan analysis.  The piece is sprinkled with nonsense like this tweet from someone described as the founder of the Center for Economic Policy and Research: “Think of where Biden would be if the NYT, WaPo, CNN, NPR and the rest weren’t doing everything they could to trash his performance on the economy.”

There are psychological reasons that inflation might have a depressive effect on the national mood, explains the Times.

 Right.  If the reality of Bidenomics and inflation itself is too much for the Times editors to process, we can hardly expect them to expand the scope of their inquiry to include the collapsing retirement hopes of the people.  But consider, as the Times crosstown rival reported recently, Americans’ 401(k) retirement plans have lost $2.1 trillion just since the first of the year!  

The average 401(k) retirement plan has lost 25 percent of its value in less than a year.  Traditional pension funds are getting crushed, too.  (We thought this important enough to pass along in our RME radio messages.)

That is Bidenomics.  Those losses are not just psychological.  They are real.  But one searches the Times piece in vain for even the word “stocks,” “retirement,” or “savings.”

It grieves us to think that the New York Times is considered the newspaper of the intelligentsia.  We trust all the senior White House and Fed officials read it.  And take it seriously.

If that is so, it confirms what we have long suspected.  The blind are leading the blind.  As long as they are, you need to protect yourselves for they are about to stumble into a very deep ditch, taking the whole country along with them.

Buy gold.


Revisiting the Gold and Silver Shortage

(And a bill to restore the gold standard!)

We have written several times of late about the recent shortages of gold and silver and the way prices in the “paper gold” or gold-substitute markets have decoupled from the prices of real, physical gold and silver coins and bars.

In essence, the question is how can the international benchmark prices (spot market prices) for gold and silver be lower while, due to rising premiums reflecting thin supplies, the real market prices of silver coins and bars are higher. (See our October 3 post Market Condition Alert! Gold and Silver Shortages!)

Republic Monetary Exchange’s trading department still has gold and silver in stock for immediate delivery for many items, although we are experiencing strong demand and we cannot guarantee that this crisis is only temporary. 

While premiums are high, worsening conditions may mean that no physical gold and silver will be available at any price.  

These market conditions have been noticed in Washington, and have provoked one congressman to demand answers.

In a September 2 post (Explain the Silver Shortage:  Congressman Demands Answers from the US Mint and Treasury Secretary!), we reported on Congressman Alex Mooney’s (R. -WV) attempt to get answers. In light of the Mint’s statutory obligation to provide sufficient coinage to meet market demand, Congressman Mooney wants to know how this shortage has been allowed to happen, driving premiums on American Eagle US silver coins to such heights, and what the authorities intend to do about it.

Due to keen interest in this story from many of our clients, here is a link to Congressman Mooney’s letter to Treasury secretary Janet Yellen and US Mint Director Ventris Gibson.

Meanwhile, we note with both interest and enthusiasm that just two weeks ago Mooney introduced H.R. 9157, the “Gold Standard Restoration Act.” 

The legislation calls for the U.S. Treasury and the Federal Reserve to publicly disclose all gold holdings and gold transactions within 30 months, after which time the Federal Reserve note “dollar” would be pegged to a fixed weight of gold at its then-market price. Federal Reserve notes would become fully redeemable for and exchangeable with gold at the new fixed price, with the U.S. Treasury and its gold reserves backstopping Federal Reserve Banks as guarantors.

“The gold standard would protect against Washington’s irresponsible spending habits and the creation of money out of thin air,” said Congressman Alex X. Mooney. ”Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would our economy be at the mercy of the Federal Reserve and reckless Washington spenders.” 


Real Money For Free People!

We want to give you a signed copy!

The following is an excerpt from Jim Clark’s important book REAL MONEY FOR FREE PEOPLE: The American Gold Story.

Both Fed money-printing and federal debt are evidence of severe character deficiencies among the American governing classes.

Fed money printing is a slap in the face of normal, healthy human interactions. Civilization is built on the implicit understanding that one may achieve his own ends by serving others. The butcher does not eat all that meat himself. The baker does not need all that bread. The candlestick maker has no use for all those candles himself. The things people in all their diversity want in satisfaction of their personal objectives are most readily achieved by the earnings they derive from providing goods and services others want, giving fair value for value received. But the proponents and beneficiaries of money printing are involved in a brazen attempt to take something for nothing, to acquire purchasing power by monetary manipulation, for which they provide nothing in return.  

It is much the same with government debt. It allows for present consumption while shuffling the bill off to future generations. Normal, healthy people try to leave something to 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 founders created the conditions for an explosion of human prosperity. Our governing classes and monetary authorities are their opposites. They have created the conditions for an explosion of impoverishment. They are the big spenders and reckless borrowers of both parties. They are the grand councilors and academic advisors of the almighty State. They and their statist epigone and media servitors are the inevitable offspring of connivers like Franklin Roosevelt and Richard Nixon, who stole the people’s gold and betrayed the nation’s good-as-gold dollar. They are a generation of trousered apes who do not know the difference between ditchwater and champagne, and of like-minded Fed officials who conflate empty paper promises with the real, enduring monetary wealth of the ages, who trade the real money of free people for a mess of monetary pottage.

By their own logic, there is no turning back. They must now continue to print money until the system crashes. It is the endgame of their folly.

REAL MONEY FOR FREE PEOPLE 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, we want you to have a copy absolutely free!

Learn 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.


Why We’re in the Mess We’re In

This Explains a Lot!

The Fed doesn’t understand inflation. Janet Yellen has even apologized for the Fed’s cluelessness.  The Fed has missed all the biggest financial calamities of our time, like the dot com bubble, the mortgage meltdown, and the return of inflation to levels last seen 40 years ago.

How can this be explained?

Clearly, the monetary authorities don’t understand the stabilizing role of an honest precious metals currency.  Congressman Ron Paul once asked a Fed chairman in congressional testimony if gold was money.  No, replied the chairman.  Well, asked Paul, if it’s not money, then why does the Fed keep so much of it?

The chairman’s non-explanatory explanation:  It’s traditional.

Whatever.

And now with inflation running hot for at least 20 months, and over 8 percent annually month after month, the Fed still hasn’t gotten a handle on things.

So maybe this explains things.  

A study from Independent Review finds that Fed board members are heavily tilted to the left.  The ratio of Democrats to Republicans is 48.5 to 1.

It is a trend that keeps on trending.  According to the study, among the Fed’s countless PhDs, the younger economists are even more likely than the older ones to be Democrats.

But here’s the kicker.  The study’s examination of papers and speeches by Fed officials came to this woeful conclusion:  “Research and speeches by the Fed economists are increasingly focusing on climate change, gender, race, and inequality.”

That explains a lot.

Climate change.  Gender.  Race.  Inequality.

Or as summed up by the Unleash Prosperity Hotline, “The Fed can’t stop inflation, but they CAN change the earth’s temperature.”


Serious Inflation

It was only a year ago that the Federal Reserve was insisting that inflation was a transitory malady.  Yet it is still with us.  Big time!

The government likes to refer to so-called “core inflation” which excludes food and energy prices.  (Like who would need either food or energy?)  The core inflation rate for the 12 months through September is up 6.6 percent.  That is the biggest increase in more than 40 years.  

So, the Fed hasn’t made a dent in inflation.  As David Stockman observes, “the Fed has raised interest rate by 300 basis points in the last six months, yet the upstream inflationary pressures embodied in the producer price index have not even budged.”

As for the overall consumer price index, it was up 8.2 percent for the 12 months through September.  That is seven months in a row that prices have risen at a rate of 8 percent or more.  Wage earners find their hourly earnings up 4.92 percent which means that with prices rising faster – 8.2 percent – they simply aren’t able to keep up.

When the hot inflation reading came in, San Francisco Fed President Mary Daly said, “ “It does show the data not cooperating.”  

Right!  That darn data!

Have you spoken with a Republic Monetary Exchange gold and silver specialist to find out how precious metals can protect you from reckless governments, their unhinged spending, and their monetary folly?

Call today and make a no-obligation appointment!


How Inflation Really Works to Make You Poorer

More About the Government’s Shell Game!

The inflation numbers for September are in and they are running red hot!  They also provide a perfect opportunity to shine a light on the government’s inflation and cost of living shell game.

Consumer prices (CPI) are up 8.2 percent from a year earlier.  Wholesale prices (PPI) are up 8.5 percent.  Meanwhile, gas prices have been rising this month so it is likely that next month’s consumer price index will be even higher.

Groceries were up 13 percent year-over-year.

The Social Security cost of living increase for 2023 will be 8.7 percent.  But recipients have been paying these higher prices for a year.  The benefits increase lags what people have been spending just to stay even.  For example, at the beginning of 2022, beneficiaries received a 5.9 percent cost of living increase.  That number was calculated from a price increased in 2021, but it was inadequate for the sharply higher prices in 2022 as inflation raged much higher through the year.

Stated differently, retirees pay higher prices all along until those prices are used to calculate a benefit increase that will be made months from now.  So, the cost of living outruns the increases.

Oh, and by the way, our Phoenix-metro clients will remember that their prices have risen 13 percent.  So, they are slipping even further behind. And that is without counting the brutal hit that many have suffered with stocks and bonds in their savings or retirement accounts.

For those who take a long-term view of wealth preservation and know the history of inflationary periods throughout history, gold makes perfect sense!


Ben Bernanke Predicts

Nobel Prize for Inflation?!

Helicopter Ben Bernanke recognized for… for what exactly?  Spreading around free money!

 The Royal Swedish Academy of Sciences has awarded its 2022 Nobel Prize in Economics to former Federal Reserve Chairman Ben Bernanke.

We don’t mean to be churlish with our headline calling it an award for inflation.  We just mean to be plain-spoken.  Inflation is exactly what Bernanke’s stewardship has gifted us.  Anyone looking at the bailout of the banksters in 2008-9, the double-digit increases in food prices, the rip-roaring higher energy prices and the everyday cost of living today has Ben Bernanke to thank.

It is not just we who are saying so.  Michael Shedlock headlines the award story this way:  Former Fed Chair Ben Bernanke Wins Nobel Prize For Wrecking the Economy.

Not to be outdone, The Committee to Unleash Prosperity newsletter puts it like this:   Ben Bernanke Wins Nobel Prize For Being Wrong On The Subprime Housing Crisis.  

That works, too.

In fact, we should expect just such awards from the Nobel judges.  The newsletter from the Committee to Unleash Prosperity points out that, “most winners of the Nobel prize in economics have been awarded to big-government Keynesians.  And most of the medal winners have an abysmal record of predicting the future. Remember, more than 14 Nobel laureates in economics wrote a joint letter in the New York Times last year assuring us that Biden’s policies would NOT cause inflation.”

David Stockman’s take is equally full of disdain:  “Oh, puleese! Ben Bernanke got the Nobel Prize for his early 1980s work on, well, why banks exist! That’s right. What all students of banking knew 100 years ago—-that banks are inherently risky because they lend long and borrow short—got gussied up into a fancy theory of ‘maturity transformation.’”

Shedlock imagined up a spoof interview with Bernanke that would go something like this:

Shedlock: Why do you think you won the Nobel Prize? 

“To learn how to save the economy, we first had to wreck it. That’s the real reason I won the prize,” said Bernanke. “And boy did we wreck it.”

“I expect to win another prize in 2025,” added Bernanke. 

“I paved the way for the Powell Fed to learn from my mistakes. QE and bank bailouts created an even bigger housing bubble under Powell than I created.”

Bernanke shares the prize with theorists Douglas W. Diamond and Philip H. Dybvig “for research on banks and financial crises.”  We don’t know them or their work, and we’re not going to look it up.


Silver’s Monetary Role

The extreme divergence in the world markets between “paper” precious metals and real physical gold and silver continues. “Paper” precious metals are nothing more than the purported paper title to gold and silver that promise to deliver at some future date.

The high premiums on physical silver suggest that in our present economic circumstance of high inflation the world is once again awakening to silver’s role as a monetary commodity.  Often, especially in normal times of growth and economic resiliency, the industrial demand for silver dominates its dual role as money as well.  Silver has actually been used as money in more times and places throughout history than gold itself.  

See our recent post Market Condition Alert! Gold and Silver Shortages!

The graph of gold and silver demand from pre-pandemic 2019 shows investment accounts for 19 percent of silver demand.  But during times of economic distress, silver’s monetary role grows more prominent.

And that is exactly what the divergence in paper silver prices and real physical silver prices suggest, that investors want silver for protection from state currency mismanagement and fraud.  And they are willing to pay for it.

Meanwhile, a new report designed to examine its long-run benefits ratifies the view that silver belongs in one’s investment portfolio.  From a news release by the Silver Institute, an international non-profit trade association:

OPTIMAL INVESTMENT PORTFOLIO SHOULD INCLUDE 4-6 PERCENT SILVER ACCORDING TO NEW REPORT

Silver Can Be a Strategic Asset Within Efficient Multi-Asset Portfolios

(Washington, D.C. – September 29, 2022) – Silver as a distinct asset class should be considered as a strategic investment allocation within a global multi-asset portfolio, according to new research by Oxford Economics, a leading independent economic advisory firm. The firm finds that investors would benefit from an average 4-6 percent silver allocation within their portfolio, significantly higher than current holdings of silver by most institutional and individual investors.


The entire report can be read HERE.

Silver’s volatility is storied.  Many remember how dramatically it outpaced gold during the last stagflation decade.  When the world turns to silver for monetary protection, its performance can be stellar.


Wars and Rumors of Wars

Gold in times of chaos and conflict!

When things get bad enough, especially on the economic front, many governments follow the advice the dying king gives his son in Shakespeare’s Henry IV:  

“Be it thy course, to busy giddy minds
With foreign quarrels.”

Now, with red-hot inflation, the national debt spiraling up over $31 trillion, and the Biden administration adding trillions in new spending, it stands to reason that it would intervene anywhere and everywhere to divert attention from the dismal performance of Bidenomics.

Along the way, the world is quickly growing far more dangerous, a veritable tinder box waiting for a spark.

The jury may still be out on the Nord Stream pipeline sabotage, but for us, the key question is cui bono? Who benefits?  In any case, it is clearly an act of war.

North Korea fired a ballistic missile over Japan just days ago; a South Korean display of its prowess in response went awry. When its own missile misfired and hit the ground inside its own base, nearby residents were fearful that a war was underway.  It does underscore the likelihood of mistakes and miscues ratcheting up dangerous standoffs.  The US and south Korean responded by firing missiles into the sea. 

A New York Times headline and lead describe Washington thinking and the escalation of risk over Taiwan.  “U.S. Aims to Turn Taiwan Into Giant Weapons Depot,” is the headline, followed by this lead: “Officials say Taiwan needs to become a ‘porcupine’ with enough weapons to hold out if the Chinese military blockades and invades it, even if Washington decides to send troops.”

After three weeks, demonstrations and counterdemonstrations continue in the streets of Iran.  When Iran grows unstable, it is good to remember that more than 20 percent of the world’s oil flows through the Persian Gulf’s Strait of Hormuz.  Ayatollah Ali Khamenei has pointed a finger at the US for planning the Iranian protests.  Those who watched the US intervention that toppled the government in Ukraine in 2014, are not willing to deny the charge.

Russia has annexed the occupied Ukrainian regions of Luhansk, Donetsk, Kherson, and Zaporizhzhia.  Meanwhile, the US has committed some $16 billion in aid and armaments to Ukraine.  As if that is not enough for busy giddy minds, President Biden is openly calling for the US to remove Putin.

But there is more.  No American should miss the news that Washington is loading up on anti-radiation medication.  Saber-rattling and nuclear threats have risen to a level not seen since the Cold War, when the Soviet’s invasion of Afghanistan, the Iranian Revolution, leftist militarism on the rise in Central America, and fundamentalists occupying a holy site in Saudi Arabia, all conspired to help propel gold and silver to new all-time highs.

We spend a great deal of digital ink on describing the latest developments on the monetary and fiscal fronts, but the escalation of nuclear threats is enough to remind us that gold is the wealth protection haven par excellence in times of chaos and war.


Looking for a Place to Hide?

May We Suggest…

A Drudge Report headline the other day read, “Wary Investors Struggling to Find Places to Hide…”

That’s because stocks have been taking a pounding.

It linked to a Wall Street Journal piece titled, “Wary Investors Struggle to Evade Market Tumult”:  

“The S&P 500 has fallen 25% this year, with all three major U.S. stock indexes heading toward their worst annual performances since 2008. Bonds haven’t provided a ballast to portfolios—the Bloomberg U.S. Aggregate bond index is on pace for its worst year on record going back to 1976, down 16%.”

Altogether, the markets are “leaving nervous investors questioning where to hide from further pain.”

Well, we feel their pain.  But it can’t be helped.   The Fed has raised interest rates five times this year to increase the cost of borrowing money.  It is trying to put the inflation genie back in the bottle.  So far, it hasn’t accomplished much other than spewing all that red ink around the stock and bond markets.

The higher rates have driven the dollar up and have driven yield-hungry Wall Street speculators and hedge funds to liquidate gold mutual funds and ETFs for 12 consecutive weeks.

But while they are leaving paper gold instruments, real people are buying real gold and silver.  They are concerned about the continued viability of the dollar and Biden-nomics.

As we have explained (Market Condition Alert! Gold and Silver Shortages!), the price of “paper” gold and silver has completely diverged from the price of real gold and silver.  High premiums on gold and silver bullion and coins mean that the real price of physical gold and silver is not taking the pounding that stocks and bonds are taking.

So, for those seeking refuge from the Wall Street carnage, we say come to us and we will give you shelter from the storm!  Speak with a Republic Monetary Exchange gold and silver specialist today.


Market Condition Alert! Gold and Silver Shortages!

Because of extreme demand for precious metals in these uncertain times, the prices for real gold and silver have decoupled from the price of gold substitutes and paper benchmark prices.  The world gold prices and index prices you read about in the newspaper are not the real price for physical gold you can take home and put in your safe.  There is not enough gold at those benchmark prices to satisfy today’s demand!


The divergence between the price of gold and silver in the “paper” market and the price for real, physical metals that you own and take possession of has now become extreme.

Premiums on all the popular gold and silver bullion coins have jumped in recent weeks, reflecting strong demand but only limited supplies.   And as we have reported, the US Mint has not been able to meet market demand as required by law.

Please see our article from the beginning of September on the silver shortage, “Congressman demands answers from US Mint and Treasury Secretary.”

Many dealers are once again unable to make immediate gold and silver delivery to their clients.  Some are forecasting long delays before they are able to make delivery.

Thanks to its long experience and market foresight, Republic Monetary Exchange’s trading department still has gold and silver in stock for immediate delivery for many items, although we are experiencing strong demand and we cannot guarantee that this crisis is only temporary. 

While premiums are high, worsening conditions may mean that no physical gold and silver will be available at any price.  

To restate:  Many of our competitors are out of gold and silver.  Either sold out, or without the necessary inventory, market connections, and experience we have.  In any case, they are not able to deliver gold and silver.

Some say to pay them now, but it will be weeks before they can come up with your gold.  

gold moves

That is a bad idea!  Do not do that!

We are Republic Monetary Exchange. We’ve been around a long time, both buying and selling precious metals.  We have inventory for immediate delivery.   

And while we think everyone needs to own gold and silver, if you need to sell precious metals, remember because of our volumes and active market, we pay the most when you need to sell. 

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


The Lost Decade

“I don’t rule out something bad happening!” says legendary investor!

The Dow won’t be much higher in 10 years than it is today.  

That’s the opinion of billionaire investor Stanley Druckenmiller.  Stock, bond, and real estate bubbles are all popping, all having been inflated by the artificial creation of money and credit.  “All those factors that cause a bull market, they’re not only stopping, they’re reversing every one of them,” Druckenmiller said on CNBC. “We are in deep trouble.”

We have cited Druckenmiller from time to time over last few years among other big money players who were buying gold.   

In 2020, he was seeing 5 – 10 percent inflation ahead.  Here is what he was saying more than a year ago, in June 2021:

“I don’t think there has been a greater engine of inequality than the Federal Reserve Bank of the United States… so hearing the Chairman [Powell] talking about visiting homeless shelters is very rich indeed… everyone wealthy that I know is making fortunes” because “this guy [Powell] is printing money like there’s no tomorrow….…for the life of me I can’t understand why the left is so excited about money-printing when all the data shows that the people who benefit from money-printing are rich people.”

“The odds-on bet is that we’re going to have inflation and inflation is going to hurt poor people, again, a lot more than rich people. The asset bubble which [Powell] is blowing up into unbelievable proportions will bust before the inflation ever really manifests itself. That’s what happened in the housing bubble in 08/09. We never really got to the inflation because the asset bubble burst… not dis-similar to what happened in 1929.”

Stanley Drunkenmiller

As for the way things a being run by the administration today, Druckenmiller is severely critical of Biden for running down the Strategic Petroleum Reserve (for what looks to us like a cynical move employed for short-term electoral advantage).  And he chides Treasury secretary Janet Yellen for running down the treasury’s savings account at the same time she could have borrowed money for a mere one percent.

Oh, well.  She didn’t understand inflation either.

Say a prayer for America and buy gold!


Are We in Trouble?

Sure. That’s why you’re going to need gold and silver!

The Federal Reserve’s decision to begin raising interest rates and unwinding a lot of the assets it bought with made-up digital money over the last 14 years is beginning to take a toll. 

Stocks down.  Bonds down.  Real estate down.  Cryptos down.

The Fed’s new higher interest rates – although still deeply negative – look good to Wall Street and foreign exchange speculators here and abroad who have been starving for interest returns.  The current yield on the US 10-year Treasury is 3.75 percent.  

That must look pretty good compared to things two years ago.  The 10-year yield was less than one percent then.  So, they have been buying dollars and making the dollar rise against other currencies.

But today’s rates are still not enough to wring inflation out of the dollar economy, at least according the Fed’s own favorite theory.  That theory demands that market rates be raised over the inflation rate.  That is why, with inflation touching 14 percent, former Fed chairman Paul Volcker pushed the Fed’s policy rate, the Fed funds rate to over 20 percent.  

It was the undoing of double-digit inflation, to be sure.  But it created the steepest US economic downturn since the Great Depression.

So now the Fed is again raising rates to undo the damage from their years of creating trillions of digital dollars.  It has already begun causing pain, but it is still completely inadequate for the Fed’s purposes.

Here is a chart showing more than 50 years of both the Fed funds rate and the CPI inflation rate.  You can see the Fed funds rate, the spiking blue line in the early 1980s, and the steep drop in the inflation rate in yellow.

On the right-hand side of the chart, you can see that the Fed has begun raising interest rates, but those rates are still far below the inflation rate.

Will the Fed stay the course?  Are Chairman Powell and Fed board members really willing to crush the economy to undo what they shouldn’t have done in the first place?  So far Powell’s record at the Fed has resembled Hamlet’s dithering:  Powell flips and he flops.  He has been indecisive and has been afraid to act when he should have.  So, we will see.  

But remember Ronald Reagan’s famous line when he was about to flip-flop on something: “When I feel the heat, I see the light!”  When unemployment soars and the recession deepens, the people will scream and the politicians will bluster and threaten.  

And the Fed will see the light.  It will crank up the digital printing presses.  If you would like a precedent, look no further than the Bank of England’s action this week.  It panicked.  As the pain from monetary tightening grew too intense, it turned on a dime, suddenly reversing course and starting money-printing and bond-buying all over again.

How do you protect yourself from these people?   With gold, of course.  


They’re Going to Need All Those IRS Agents

Reason #439 to own gold and silver!

Today we post without (much) commentary, excerpts of recent remarks by Treasury secretary Janel Yellen about the Internal Revenue Service.  Much of what Yellen said at the 9/15/22 event at the IRS facility in New Carrolton, MD, is simply wrong, but we feel you should see them for yourself:

As our nation’s revenue collection agency, the IRS is a foundation of our government and society. The IRS collects 96% of the revenue that funds the federal government – supporting our priorities from national security to infrastructure to social security.[1] It also is one of the very few parts of the federal government that touches nearly every American household….

Well, now.  We can’t resist denying the IRS is a foundation of our government and society.  Because words mean things, we point out that foundation means something there from the beginning upon which everything else is built or rests, like the foundation of a building.  But the Internal Revenue bureau was a civil war creation of Abraham Lincoln in 1862, while the 16th Amendment, the income tax amendment, wasn’t appended to the Constitution until 1913.

On one day last year – March 15 – the IRS received 8.6 million phone calls….

The world has become more complex. Enforcing tax laws is not as simple as it was a few decades ago. Average tax returns for large corporations now reach 6,000 pages. And more complicated partnerships have skyrocketed from less than 5% of total income in 1990 to over a third today.

As a result, the tax gap – the amount of unpaid taxes – has grown to enormous levels. It’s estimated at $7 trillion over the next decade.  And since the IRS has lacked the resources to effectively audit high earners – whose audits are more complex and take more time – these high earners are responsible for a disproportionate share of unpaid taxes.

To illustrate: In 2019, the top one percent of Americans was estimated to owe over a fifth of unpaid taxes – totaling around $160 billion.  Data shows that less than half of all taxes from more complex sources of income are paid. Yet nearly all taxes due from wages and salaries – which are earned by ordinary Americans – are paid.

In sum, high earners are paying far less than they owe. This means that working families are shouldering a disproportionate burden…. 

This inequity is unacceptable. As leaders and employees at the IRS have warned for years now, enforcement of the law is not only a means to raise revenue. It is also a matter of fundamental fairness….

Statists always use appeals to fairness to gobble up more statist territory.  For example, inflation has historically shifted lower-income taxpayers into tax brackets that were originally enacted to “get the rich.”  Similarly, Americans are plagued with paperwork and bureaucracy that was enacted as a means to “get the drug dealers.”  But they really burden the people with paperwork and increase state surveillance, while the drug dealers go about dealing their wares.  Indeed, despite decades of proliferating regulations and laws, last year saw more drug deaths among Americans than any other year in history.  

Yellen continues:

Last week, I gave an economic speech discussing how our administration’s plan will create a stronger, more resilient economy with greater fairness for all. I believe that adequately funding the IRS is core to our success. It raises the revenue for us to make important investments in our economic strength. It makes sure that all Americans are playing by the same rules. It avoids misallocation of resources in the economy at large. And it does so by deterring taxpayers from shifting their activities toward more opaque sources or engaging in tax evasion.

And finally, having word-searched Yellen’s speech, except of the badly misnamed “Inflation Reduction Act,” the Treasury secretary didn’t utter a word about inflation, which is an un-debated, un-enacted, and un-legislated (and therefore illegal) tax on the people.  If Yellen wishes to go on at length about unfair taxation, maybe she should mention that.  

But then, Yellen admitted recently that she didn’t really understand inflation.  Which, in the current circumstances especially, should be grounds to ask for her resignation.

So, there you have it.  The growth of the IRS and its 87,000 additional armed agents is reason #439 to own gold and silver.


Biden Accelerating Central Bank Digital Currency

Biden is putting the pedal to the metal for a Central Bank digital currency. Time to fortify your gold and silver position!

Suppose the government wants to ration gasoline or anything else.  Suppose it wanted to stop anyone who disagrees with it from traveling.  Suppose it wants to devalue the currency or impose a new tax.  Suppose it wants to know everything you do.

That’s when a new Federal Reserve digital currency will come in handy!  So, to add to its long record of accomplishments – like the Afghan withdrawal, double-digit inflation, and the border mess – the Biden team is pushing hard on creating a new Central Bank Digital Currency.

The White House is publicizing it as just another part of Biden’s “vision.”

Here is the latest from the Associated Press:

WASHINGTON (9/16/2022)  – The Biden administration is moving one step closer to developing a central bank digital currency, known as the digital dollar, saying it would help reinforce the U.S. role as a leader in the world financial system.

The White House said on Friday that after President Joe Biden issued an executive order in March calling on agencies to look at ways to regulate digital assets, the agencies came up with nine reports, covering cryptocurrency impacts on financial markets, the environment, innovation and other elements of the economic system.

Treasury Secretary Janet Yellen said one Treasury recommendation is that the U.S. “advance policy and technical work on a potential central bank digital currency, or CBDC, so that the United States is prepared if CBDC is determined to be in the national interest.”

“Right now, some aspects of our current payment system are too slow or too expensive,” Yellen said on a Thursday call with reporters laying out some of the findings of the reports.

Central bank digital currencies differ from existing digital money available to the general public, such as the balance in a bank account, because they would be a direct liability of the Federal Reserve, not a commercial bank. According to the Atlantic Council nonpartisan think tank, 105 countries already are exploring or have created a central bank digital currency.  The council found that the U.S. and the U.K. are far behind in creating a digital dollar or its equivalent.

Treasury, the Justice Department, the Consumer Finance Protection Bureau, the Securities and Exchange Commission and other agencies were tasked with contributing to reports that would address various concerns about the risks, development and usage of digital assets. Several reports will come out in the next weeks and months.

gold and silver investments

The US government has been at war with cash for some time.  For example, it imposes burdensome and often quite ridiculous restraint on the use of cases, including needless reporting requirements and even a presumption that cash transactions are necessarily indicative of criminal behavior.

The reality is that in an age of widespread identity theft and large-scale computer hacking, cash may be a preferred way for one to protect his privacy from the prying eyes of criminals.

But the objective of a central bank digital currency is the complete elimination of physical cash for any transaction.  It seeks the state’s total surveillance of each individual and every commercial activity.  

It is a dagger aimed right at the heart of American freedom.

Your single best defense against a central bank digital currency is the ownership of physical gold and silver, the world’s most enduring monetary assets that you have in your physical possession.


Common Sense About Fed Interest Rate Policy

It’s too little, too late to stop inflation!

“The Great Central Bank Pivot is now underway around the globe, but it’s not the one Wall Street has been praying for. Instead of another round of easing juice to brake the obvious fall in economic activity, central banks en masse are racing to goose interest rates by 75 or even 100 basis points.”

David Stockman

It’s not often we find ourselves pointing to anything that emanates from the Federal Reserve’s huge stable of economists.  But like a stopped clock, somebody there is bound to be right sometime.

Now we have a candidate.  A pair of economists, Francesco Bianchi of Johns Hopkins University and Leonardo Melosi of the Chicago Fed presented a report at the recent central bank confab at Jackson Hole, Wyoming.  Their paper, “Inflation as a Fiscal Limit,” deserves a little more exposure.

Especially amidst all the hubbub and confusion surrounding the Fed’s interest rate hikes.  We will paraphrase the authors’ point:  Even if the Fed (representing monetary policy) is serious about wringing inflation out of the economy, if the big spenders in Washington (representing fiscal policy) don’t take offsetting steps to rein in spending, “a vicious circle of rising nominal interest rates, rising inflation, economic stagnation, and increasing debt would arise.”

That is really pretty elementary, although it is a viewpoint that may not be often expressed in the Marriner Eccles building.  But it is exactly where we are today.  The Fed can raise rates but expecting the White House and Capitol Hill to do something about spending… forget about it!

Without endorsing everything the authors say, here is a bit more common sense:

In this pathological situation, monetary tightening would actually spur higher inflation and would spark pernicious fiscal stagflation, with the inflation rate drifting away from the monetary authority’s target and with GDP growth slowing down considerably. While in the short run, monetary tightening might succeed in partially reducing the business cycle component of inflation, the trend component of inflation would move in the opposite direction as a result of the higher fiscal burden.

The authors argue in a nice, political, and academic way that something must be done about spending.  Well, the Biden administration is doing something about spending:  they are driving it to the moon!  The exact opposite of what needs to be done!

The folks at the Committee for a Responsible Federal Budget estimate that “the Biden Administration has enacted policies through legislation and executive actions that will add more than $4.8 trillion to deficits between 2021 and 2031…. This is on top of the trillions of dollars we were projected to borrow before President Biden took office.”

We are not politicians or Fed economists, so we don’t mind addressing the situation directly and honestly:  It’s every man for himself!  In other words, don’t expect the authorities to rescue or protect your wealth.  You must do so yourself.  You must do so with gold and silver.


Views About Stocks and Gold

Worth Considering!

Here is a sampling of market views from people we follow from time to time, some about gold, the dollar, the stock market, and the economy.   These are all important topics, and we encourage you to visit with a Republic Monetary Exchange gold and silver specialist to create a sensible plan to protect yourself in these inflationary and turbulent times.

Charlies Munger is Warren Buffett’s partner at Berkshire Hathaway.  He is 98 years old and still astute and worth heeding:

“There’s never been anything quite like what we’re doing now, and we do know from what’s happened in other nations if you try and print too much money, it eventually causes terrible trouble. And we’re closer to terrible “trouble than we’ve been in the past, but it may still be a long way off. I certainly hope so….

”Well, when Volker, after the seventies, took the prime rate to 20% and the government was paying 15% on its government bonds, that was a horrible recession. Lasted a long time, caused a lot of anger and agony. And I certainly hope we’re not going there again. I think the conditions that allowed Volcker to do that without an interference from the politicians were very unusual… 

“You may wish you had you had a Volcker style recession instead of what you’re going to get. The troubles that come to us could be worse than what Volcker was dealing with. And harder to fix.”

Raj Subramaniam is the CEO of FedEx.  He believes the economy is headed into a worldwide recession.  After a disappointing quarterly report for the first quarter, Subramaniam said:

“We’re seeing that volume decline in every segment around the world, and so you know, we’ve just started our second quarter,” he said. “The weekly numbers are not looking so good, so we just assume at this point that the economic conditions are not really good….

“We are a reflection of everybody else’s business, especially the high-value economy in the world.”

FedEx is responding to its troubling situation by closing more than 90 FedEx Office locations and five corporate offices.  

Alasdair Macleod is a well-known gold market commentator.  We cut to a succinct comment from Macleod in a longer piece carried on ZeroHedge:

“We can begin to anticipate the path to the destruction of purchasing power for all fiat currencies, not just those of Zimbabwe, Turkey, and Venezuela et al. A global hyperinflation is proving impossible to avoid.”

Doug Casey has been commenting on the economy and the state of freedom in the US for decades.  Here is a snippet from Casey about the new 87,000 armed IRS agents:

“These new IRS agents are a direct attack on the middle class. The elite hate the middle class and what they stand for—independence, stability, and traditional values. The fact that they’re doubling the size of the tax police is truly extraordinary. As the economy continues to decline, you can expect class warfare—along with race and sex warfare—to increase.”

The last word goes to famed investor Jim Rogers:

“If we have inflation, you should own things that will go up in price. Real assets always go up in inflation and that is the way I am looking to protect myself.”


The CPI Numbers Should be Even Worse

A few words about energy prices and gold!

Consumer Price increases reported through August were higher than most people on Wall Street seem to have anticipated.  So, with the latest CPI report, the stock market broke and broke hard.  The Dow Jones Industrials fell 1,276.37 points, or almost 4 percent on Tuesday (9/13).  

But the CPI numbers would have been much worse if it were not for the fact that gas prices, sky-high at around $5 a gallon last summer, have eased off.

Despite the recent dip, gas prices have spent the last six months much higher than they were for the year before.  But even with gas prices falling more than 10 percent in August, and helping moderate overall consumer prices, the CPI was still up a red-hot 8.3 percent for the last 12 months (and in case you missed it, up 13 percent in Phoenix).  

But does the fact that gas prices were lower mean that things are getting better on the energy front?  We’re afraid not.  

Gas prices are down in part because of weaker demand.  Americans have meaningfully cut back on their driving, consolidating errands, foregoing trips, avoiding going into the office, and taking any other steps they can to cut down on trips to the gas pump.  President Biden has been taking credit for lower gas prices in an unseemly way.  If all commercial driving ground to a standstill, gas prices would fall even lower, but it would hardly be a sign of economic resilience.

Other energy prices across the economy are still high and, like gas prices this summer, they are having a depressive effect on the economy.  More and more Americans are having trouble keeping their energy bills paid.

From the Wall Street Journal:

Gasoline prices may be falling but other energy costs are rising, report Collin Eaton and Jennifer Hiller. Electricity costs rose 15.8% in August from a year ago, the biggest jump since 1981, driven by higher prices for natural gas. About one is six American families has fallen behind on energy bills and owe a collective $16 billion, roughly twice the amount in 2019. That number could rise this winter, a time when energy bills typically increase.

We call this to your attention not only because energy makes the world go around, but because this won’t be the first time that rising energy prices have driven precious metals prices higher.  We cite the oil price shocks of 1973-74 beginning with the Arab oil embargo and the dramatic gold and silver bull markets of that decade. 

In any case, rising oil prices act as a tax hike on the productive economy and threaten us with the stagflation that accompanied the 1970s.

High US inflation also causes foreign energy producers to resist selling their appreciating resources for a depreciating currency like the dollar.  This in turn promises to accelerate the move by the central banks of the world out of the dollar and into gold reserves instead.


Biden’s Banana Republic

Take advantage of Bidenomics to protect yourself!

It’s a distinction no one would hope for, no one would want.  But it goes to the Phoenix area, nonetheless.

Phoenix once again has the highest Consumer Price Inflation in America.  Prices are screaming along, up 13 percent over the past 12 months.  That’s almost five percent over the national inflation rate of 8.3 percent.  We take special note of this distinction because Republic Monetary Exchange’s offices are in Phoenix.  And although we have clients across the country, many are here in Arizona.

Food prices are up double-digits, too.  Everywhere, not just here.  

It is no exaggeration to say that we are now in banana republic territory!

Biden is determined to turn America into a third-world country and to turn the US dollar into a throwaway currency.  And he’s doing a damn good job of it!

Meanwhile, the Federal Reserve remains in a state of confusion.  It was last December the Fed finally realized that inflation wasn’t transitory.  That’s when they said they would take whatever steps were necessary to fix it.  That was nine months ago, yet inflation continues to run red hot!

Now they really are in over their heads.  The prospect of them reeling from one mistake to another has created buying opportunities in precious metals that you could only have hoped for.   But you must act.  Don’t be victimized by Bidenflation.  Take advantage of their policies and this opportunity to buy gold at preferred prices.

Things have become much too serious to delay any longer.  Speak with a Republic Monetary Exchange precious metals professional and protect your wealth and your family yourself with gold and silver.

Protect yourself with gold and silver.  Real money.  Constitutional money.  

While you still can!


USA Slips Again in Annual Freedom Ranking

The Fraser Institute in Canada is one of the world’s leading think tanks.  Each year the Institute publishes an Economic Freedom of the World Report.  The review compares the state of human freedom in the nations of the world, ranking countries for the policies that support freedom, including sound money, legal systems and property rights, the size of government, and similar criteria.

Hong Kong again tops the Fraser Institute’s 2022 Annual Report for human freedom, covering conditions through 2020.  

US freedom has been decaying for years.  In 1980 and 1990, the US ranked second, but it fell to fifth place in 2010 and to sixth place in 2015.

Slipping again, the United States today ranks only number seven.  

In overall freedom ratings, the US metrics came in lower than at any time since the Jimmy Carter administration.

Because the assembled data in this year’s report is through 2020, it covers the pandemic lockdowns, not a banner interlude for free people.  In fact, after years of improving freedom worldwide, the Institute’s rating for 2020 fell .14 points.

Here are the top 10 most free countries in order:

  1. Hong Kong
  2. Singapore
  3. Switzerland
  4. New Zealand
  5. Denmark
  6. Australia
  7. United States
  8. Estonia
  9. Mauritius
  10. Ireland

The countries in the bottom ten are no surprise.  In descending order, they are Democratic Republic of Congo, Algeria, Republic of Congo, Iran, Libya, Argentina, Syria, Zimbabwe, Sudan, and Venezuela.

The freedom rankings of other countries of interest include Japan (12th), Canada (14th), Germany (25th), Italy (44th), France (54th), Mexico (64th), India (89th), Russia (94th), Brazil (114th), and China (116th).

When we watch our country’s freedom ebbing away, we are reminded of an old Swiss saying: “Good money is coined freedom.”  It makes sense to compensate for the deteriorating economic environment with a portfolio of gold and silver coins in your personal possession.


How Are Americans Doing in the Bidenflation Regime?

So how are your fellow Americans faring under the Bidenflation regime?  

Just like you think they are.  Not well!

Well over half say that they are suffering moderate to severe financial hardships, according to a new Gallup poll.  

In November, when the authorities were still insisting that inflation was transitory, 45 percent of Americans said the price increase was causing their household financial hardship.  By January the number had risen to 49 percent.

But the numbers keep climbing.  Now a majority, 56 percent of Americans, are citing financial hardship.  It doesn’t take long to impoverish the middle class and upend an entire country with funny money, does it?

Among those with household incomes less than $48,000, 26 percent cite severe hardship, as do 12% of middle-income Americans.  Even upper-income Americans are feeling the pinch, with 4 percent citing severe hardship.  

We don’t have much confidence in any of the government measures of price inflation, but for the record, here is the one the Federal Reserve claims to rely upon, the Personal Consumption Index.  It is back into territory that has not been seen since the early 1980s.

With prices climbing, and rates where we haven’t been in decades, the Gallup survey asks what respondents are doing to cope.  Many cite buying only essential items.  Others are traveling less, driving less, and canceling vacations.  Other strategies involved buying cheaper and generic goods, dining out less, and cutting entertainment. 

And that – widespread spending cuts across the board – is how recessions get underway and pick up steam.

For many Americans, the struggle to stay even involves working more hours and looking for a second job.  Others report they are canceling medical appointments and procedures.  No wonder the American lifespan is falling fast.

The British Medical Journal reported this month that American longevity has seen its sharpest decline in a century.   It is down by almost three years since 2019.  

The Gallup poll results are based on an Aug. 1-22 web survey that interviewed over 1,500 members of Gallup’s probability-based panel.


But Who Will Pay for It All?

Stand down, Powell!  We’re going to need that printing press!

After the humiliating matter of insisting that inflation was transitory when it was anything but, Federal Reserve chairman Jerome Powell insists now that the Fed is going to do whatever it takes for as long as it takes to get inflation under control.  

Never mind that he hemmed and he hawed around about if for months.  But finally at the central bankers’ confab at Jackson Hole, Wyoming last month, Powell displayed new resolve to do what Paul Volcker did 40 years ago, and raise interest rates until inflation has been mostly wrung out of the economy – or at least relapsed to two percent annually.

We don’t know if Powell can pull it off – if the money-printing coalition of Fed board members will turn on him before he gets there, but for now, we are willing to just watch.

Unfortunately, the folks a stone’s throw away from the Fed at the White House and those down the Mall at the Capitol have a different idea.  

They have some serious spending to do.   After all, there’s an election dead ahead and another one after that.  “Get out of the way,” they seem to be shouting at the central bankers in the Mariner Eccles building, “We have votes to buy!”

It is a little hard to keep up with all the new Federal spending.  The latest big-ticket item is Biden’s student loan initiative.  That’s a half-trillion-dollar proposition.  In fact, counting what came before, Biden has shoveled some $750 billion toward the student loan boondoggles.

Meanwhile, we confess to being incapable of keeping up with all the money Biden is stovepiping Ukraine’s way.  But don’t blame us.  The spending is coming so thick and fast that it would challenge any number cruncher.  Here’s just a sampling of the headlines:

  • Biden administration announces nearly $3 billion in new military aid for Ukraine
  • Biden-Harris Administration Announces $550 Million in New U.S. Military Assistance for Ukraine
  • Biden signs a $40 billion package to help Ukraine fight Russia
  • Biden announces an additional $1B in weapons and humanitarian aid to Ukraine
  • Biden administration announces $450 million in additional military assistance for Ukraine

You begin to see the problem.  Keeping up with it all would be a full-time job.  And we have a business to run and clients to serve.

But there are a couple of other things that will contribute to Bidenflation.  $480 billion for the Inflation Reduction Act.   The $1.9 trillion American Rescue Plan.  The 1.2 trillion Infrastructure bill.  

They used to say a billion here and a billion there and pretty soon you’re talking about real money.  But things have evolved.  Now they say, a trillion here and a trillion there…

So keep those printing presses warmed up, Jerry.  We’re going to need them!


Do it Now!

You’ve Always Meant To… and Now is the Time to Buy.

Things are happening fast.  The Constitution is ignored, the President is brandishing F-15s, and the monetary system is in trouble.  And forty percent of the people think we’re headed for civil war!

But wait, as they say in infomercials…  There’s more!

California thinks it should outlaw the internal combustion engine.  And you know who is doing well?  The dollar stores, as Americans grapple with Bidenflation.  In fact, the Daily Mail reports that Americans are spending about $500 more per month than we did last year for the same items.

We’re in trouble.

So you always meant to buy gold and silver, but you haven’t gotten around to it yet?

Better not wait.  Act now.  Right now!  Summer is over, beach vacations are becoming memories, and kids are back in school.  It’s a great time to make changes for the future.

You probably already know a lot of important reasons to buy gold. Like its thousands of years of history as the world’s preferred money.

Let us give you one more reason.  It is the unfortunate but unchanging trajectory of American prosperity.

Wages that don’t keep up with inflation, the destruction of the dollar, the explosion of debt, and the polarization of wealth: are all trends in force.   And a trend in force remains a trend in force until something changes it.  There is nothing on the horizon – nothing short of a complete reboot of the monetary system – that will change these trends.

Silver Bars

This is a good time to assess our national trajectory as well as your personal trajectory.  Let us show you how gold and silver can help you.  

If you have always thought about owning precious metals, call on us now.  Don’t wait for what a Financial Times story the other day called “A post-dollar world!”  

And don’t wait for higher prices.  Act now on what you have long resolved to do anyway!  


The Most Important Global Monetary Megatrend!

The De-Dollarizing World!

Wall Street and bubble-vision endlessly fret and debate over the Federal Reserve’s next move.  “Will the Fed raise rates 50 basis points in September?  Or will it go for 75?”  But while they obsess, something much bigger is going on.  Something that is mostly overlooked.

We have called it the world’s most important monetary megatrend because it changes the correlation of global economic forces even as it will suppress Americans’ standard of living.

It is the move away from the dollar as the world’s reserve currency.  It appears to be re-enacting Hemingway’s description of how someone goes bankrupt: “Slowly at first, and then all at once!”

With many countries abandoning the gold standard during World War I, the still gold- backed US dollar became the world’s de facto reserve currency.  That status was formalized after World War II.  

But being the world’s go-to currency doesn’t last forever.  There have been six globally dominant reserve currencies since the 15th century.  They have lasted an average of 94 years.

The dollar has had a run of about 100 years at the world’s primary reserve currency and standard of international commerce.  It is not that a lifespan of 100 years is pre-ordained or the result of some iron financial law.  In fact, if the dollar were honestly managed as a gold-based currency it would have had a much longer run in this privileged role.  

But instead, confidence in the global dollar-based monetary system is beginning to crack.  Banks around the world are replacing their dollar reserves with gold.  In the first half of 2022, central bank gold reserves grew by 270 metric tons.

This loss of confidence in the dollar is justified by roaring inflation, trillion-dollar deficits, ballooning debts, both corporate and governmental, and politics driven by giveaways, vote-buying, and spending sprees.  Dollar users are also being driven away by an endless parade of US sanctions against countries that don’t defer to the American empire.  In this way, the US is hurting itself.

We would like to see our friends and clients protect themselves and profit from advance knowledge of this historic trend.  Simply call or visit an RME Gold professional to implement a sound strategy for the times ahead.


Explain the Silver Shortage

Congressman Demands Answers from US Mint and Treasury Secretary!

The market for physical silver investors has been challenging for at least a couple of years now, with widespread shortages and the failure of the US mint to meet market demand as the law requires.

Fortunately for our clients, Republic Monetary Exchange has been able to meet its customers demand for silver, even as many of our competitors have cited long delays and even asked clients to pay in advance for silver to be delivered at some indeterminate time in the future.

Now a US Congressman has written Treasury secretary Janet Yellen and US Mint direct0r Ventris Gibson demanding answers.

In his letter, Congressman Alex Mooney (R. -WV) notes that “the U.S. Mint has only made 11.6 million ounces of the silver bullion coin available to the public through July 2022 – barely half of what has been supplied through the first seven months of prior years when demand has been similarly strong.”

“This shortage in U.S. Mint production has apparently led to extremely high market-based premiums on Silver Eagles (as high as 70% over the silver melt value) – even as comparable items produced by other sovereign mints and private mints were not beset by such shortages or historically high premiums.”

“The high costs resulting from the U.S. Mint production shortage directly harm U.S. citizens wishing to avail themselves of a U.S. legal tender means of protecting their financial security from the effects of inflation.”

Rep. Mooney is demanding answers from Yellen and Gibson to these specific questions:

  • Does the Secretary believe the Silver American Eagle coin is being produced in “qualities and quantities that… are sufficient to meet public demand”?
  • Why is only a single supplier currently allowed to (or willing to) provide the U.S. Mint with silver blanks for its Silver Eagle program?
  • Given its statutory mandate to amply supply these coins to the public, why doesn’t the U.S. Mint have a policy to build a reserve of silver blanks during periods of slower demand in order to create a buffer for periods of higher demand?
  • Has the U.S. Mint examined the practices of other sovereign mints – such as Britain’s Royal Mint, Australia’s Perth Mint, the Austrian Mint, or the Royal Canadian Mint – to learn from their relative success in meeting high public demand for their own silver coins? If so, what were the resulting findings or recommendations?
  • What actions are currently being undertaken to address the Mint’s production problems (which reportedly extend beyond the Silver American Eagle coin program) and when will the U.S. Mint once again be able to fulfill its mandate to meet public demand?

Republic Monetary Exchange subscribes to best practices for the protection of its clients.  Due to superior market experience and capitalization, we have been able to make delivery to our clients of all the popular silver and gold investment products when others could not, even during the difficult years of the pandemic lockdowns and supply chain challenges.  We strongly advise against sending money to boiler room operators or undercapitalized dealers and waiting for future delivery.  Republic Monetary Exchange delivers both gold and silver “on the spot” at the time of purchase and provides immediate payment for liquidations.

We eagerly await and will report the Treasury and US Mint’s responses to Rep. Mooney’s inquiries.


featured image credit: Gage Skidmore

The End of Abundance

“What we are currently living through is a kind of major tipping point or a great upheaval … we are living the end of what could have seemed an era of abundance … the end of the abundance of products of technologies that seemed always available … the end of the abundance of land and materials including water.” 

French President Emmanuel Macron, August 24, 2022

Is it the end of abundance?  Not just for France, but for much of the rest of the world including us?

Well, of course, it is.  Governments like theirs and like ours have killed the goose that laid the golden egg.  And it is just that simple.

Look no further than President Biden’s new student debt initiative.  Some people owe other people a lot of money.   Now Biden says they don’t owe it anymore.  But his public relations people are unable to answer the simple question, “Who pays for it?  Who eats the loss?”

There is no understanding in Washington and most of the media that there are two sides to the balance sheet.  So, we hear a great deal about the wonderful benefits to those who are relieved of their debt.  And we get no answers about who is left holding the bag, and who pays for it.

The political calculation is obvious.  Biden isn’t actually paying for anything himself.  He’s not forgiving anyone who owes him money.  He’s shifting the burden from the visible 20 million borrowers who will benefit, to the less visible those not identified by the White House, who will now carry the load.

But months before the election, Biden expects that he and his party will be rewarded for this burden shifting by the votes of the grateful.

This has prompted newsletter writer Bill Bonner to remark that Biden should “take aim at all the other disagreeable debits in our lives; he should cancel auto-loans… and mortgage loans… and payday loans… revolving loans… government debt… pawn shop loans… bank loans… credit card debt… margin loans… social obligations (‘they invited us…we need to reciprocate’) …loans for solar panels and EVs… child support… alimony… gambling debts… and bar tabs too.”

When governments spend without regard to who pays the bills and how debt leads to disaster!

The world is struggling under the weight of unsupportable debt. Total world debt is about $300 trillion.  That is more than 350 percent of the global GDP.  It is more debt than can honestly be repaid.   There will be huge losses.  And it is growing ever more difficult for governments and central bankers to conceal the extent of the crisis.  That is why Macron admits that France has been living under a series of crises, “each worse than the last.”

We can’t let the governing classes blame all this debt on the pandemic.  Debt began growing rapidly long before anyone heard the word Covid.

What will be done?   The same thing has been done many times in many places.  The authorities will print ever more worthless money to pay their bills and service their debt.  It is really a painful way of defaulting over time.  Creditors, savers, pensioners, and Social Security recipients get the nominal amount they expect, but it doesn’t buy as much.  We are seeing this already.  

The Federal Reserve holds trillions of dollars of US Treasury debt.  Think for a minute just how weird that is.  The government spends money it doesn’t have, so it borrows it by issuing and selling Treasury bonds.  Then the Federal Reserve purchases those bonds with money that it doesn’t have.  It purchases those bonds by digitally “printing” new dollars.

We think that the goose that laid the golden egg is being slaughtered.  But this business of the Fed covering the US deficit by printing money suggests a different animal metaphor:

The snake swallowing its own tail!  

Either way, it is the end of abundance.  


The Economy in Pictures

You’ll want to own gold after this…

Let’s start with a chart of inflation rates around the world.

At 8.5 percent, the US inflation rate is above other countries in the developed world like Germany (7.5 percent) and Canada (7.6 percent), but slightly below the Eurozone (8.9 percent. 

Here is the overall US inflation rate centered on the CPI.  No matter how they spin it with alternative measurements, it remains bad news.  

As far as food prices go, you have two choices:  food at home and food away from home.  Here are both.

New home sales are crashing.  Michael Shedlock reports that new home sales in July are down 12.6 percent from a month ago and 29.6 percent from a year ago.

Here is some grim reaper news.  American life spans are growing shorter.   Not a good thing.

And finally, here is the gold price this century.


Why the Inflation Reduction Act Will Not Reduce Inflation

Stop the Presses! The “Inflation Reduction Act” won’t Reduce Inflation!

In a story that should surprise precisely no one, Yahoo/Finance reports that President Biden’s Inflation Reduction Act “will have no measurable impact on inflation.”

The story cites Oxford Economics economists who write, “Our preliminary analysis of the Inflation Reduction Act (IRA), a climate, tax, and health-focused bill, shows it will boost the level of GDP by about 0.2%-0.3% by the end of 2031 and, despite its name, will have no measurable impact on inflation.”

The Wharton School at the University of Pennsylvania was slightly more skeptical, finding that the Act would slightly increase inflation through 2024.

Some have been asking, in light of President Biden’s pronouncement that inflation was “zero” in July, why we would even need an inflation reduction act.  

US households are spending an average of almost $500 a month more this year for the same goods and services they bought last year.  If the Inflation Reduction Act actually reduced inflation, that extra $500 a month expense would go down, which is something nobody expects.  

What the Inflation Reduction Act will accomplish, though, is the intrusion and harassment of the American people.  The Congressional Budget Office reports that the IRS will collect billions of dollars from low- and middle-income households.  It finds that audits of taxpayers making under $400,000 will squeeze some $20 billion dollars in additional revenue.

Let us leave you with this representation of the skyrocketing Producer Price Index.  Producer prices are wholesale prices.  They grow up to be consumer prices!

China and India Keep Buying Gold!

The subterranean flow of gold from the West to the East keeps on keeping on!

Swiss exports of gold to China surged in July, according to the latest reporting from Reuters.

More than 80 metric tons of gold worth $4.6 billion made its way from Switzerland to China in June.  That is up from 32.5 tons shipped in June and is the second highest monthly total in the ten years that numbers have been tracked

Altogether in July, Switzerland, the largest gold refining and transit center, shipped 186.2 tons of gold.  15.8 tons of that went to India, the most sent to India since 2016.

According to Reuters, Swiss customs data shows that “Switzerland imported 261 kilograms of gold from Russia, taking the total imported during May, June, and July to 3.6 tons worth 225 million Swiss francs ($235 million).

Although Switzerland banned imports of Russian gold following the invasion of Ukraine, according to Reuters, Swiss customs officials say “the imports in May and June were of Russian gold but that the metal came from Britain, a major gold storage center. They said they had no evidence that the gold was produced after Russia invaded Ukraine.”

This news is just additional evidence that the world center for gold is shifting to the East.  China’s total gold holdings continue to climb, with much of its position unreported.  In addition to its central bank’s official gold reserves, many authorities have concluded that even more gold reserves are held off the books by entities like the Communist Youth League and by China’s army.

It has been our repeated observation that nations and cultures that are net acquirers of gold tend to dominate the affairs of mankind, while those, like the West, that dishoard gold tend to become subordinated to them.

We believe that what is good for the monetary health of nation-states as they jockey among one another for dominance is also good for individuals.  Just as gold can prefigure the rise and fall of nations, it provides superior wealth preservation for individuals, especially during periods in which the world is being shaken.

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

graphic credit: Visual Capitalist (design by Amy Kuo)

Wall Street Bloodbath!

What They Are Saying!

We hope you haven’t wearied of us writing from time to time about Michael Burry.  For those who don’t remember, Burry is the somewhat quirky investment advisor made famous in the movie about the bursting of the mortgage bubble, The Big Short, in which he was played by Christian Bale.

Burry made himself and the investors in his fund hundreds of millions of dollars by shorting mortgage credit instruments back during the mortgage meltdown.  

It’s not that he is always right.  Nobody is.  But Burry understands more about finance and economics than your average Federal Reserve official.  And he regularly shows flashes of brilliance.  

For example, while the Fed was patiently explaining transitory inflation to us a year and a half ago, Burry was tweeting furiously about inflation on our doorstep.  And not just a little.

Most recently, Burry’s hedge fund Scion Asset Management has dumped almost all his stock holdings.  Among the stocks he exited are big names like Alphabet (Google) and Meta (Facebook).

We’re not surprised.  Burry has been talking about a stock crash since before the big sell-off hit earlier this year, and he doesn’t think it’s over yet.

We want to mention Wall Street veteran Art Cashin as well.  Cashin is Director of Floor Operations at UBS Financial Services.  “Overbought” is Cashin’s description of stocks at today’s levels.

Have you heard the term “analyst herding”?  It is when stock analysts are acting like cattle, and sometimes stampeding off a cliff together.  Robert Buckland, who heads a team of stock strategists at Citigroup, finds that, just like prior market crashes, “analysts are net buyers of every sector in every region.  But then they usually are.”

“Our index of global sell-side recommendations,” Buckland says, “is back to peak bullishness levels reached in 2000 and 2007, after which global equities halved.” 

And finally, here’s the latest from Wall Street legend and bubble expert Jeremy Grantham who thinks the next leg down in the stock market could hit in September:  “There’s nothing as quick and spectacular as a bear market rally. With hindsight they signify very little, but at the time they frighten the pants off bears, and they give hope that all is over, all is forgotten, and it’s back to the races.” 

Despite the evidence of your own eyes, Washington pronounces zero inflation and zero recession.  If you would like some straight talk about monetary conditions and how to protect yourself and your family, speak with a Republic Monetary Exchange gold and silver professional today.


The Unbacked Dollar Anniversary

The Day They Closed the Gold Window!

This week we mark a day that lives in monetary infamy, a day fifty-one years ago that determined America’s economic trajectory to this very day.

It is important enough for Americans to understand what happened then and how the gold dollar became the unbacked paper dollar, a dollar that made today’s inflation possible, that we re-tell the story every year about this time.  

Here is the way we recounted the story three years ago, in 2019:

The US has had paper dollars for a long time, but throughout most of our history, even the paper dollars were tied to gold.  Until this date, August 15, back in 1971.  It was then, 48 years ago today, that President Nixon severed the last remaining link of the U.S. dollar to gold.  

Today, almost half a century later, we are experiencing the long-term consequences of that decision.   Those consequences include a trade and currency war, a race among nations to destroy the purchasing power of their currencies, unrestrained money printing, inadequate personal savings, interest rate manipulations, weak economic growth, a stalled out middle-class, growing deficits, and skyrocketing debt.

Under the post-World War II monetary regime, the rest of the world had been persuaded to hold dollars as reserves and conduct international commerce in dollars.   But U.S. politicians of both parties had a grand time for years spending money and buying votes left and right to delight their special constituencies.   There was the Great Society and the Vietnam War, too.  Because they had the Federal Reserve to print money for them, it had been a wild spree.  

Richard Nixon, 37th President of the united States
Richard Nixon, 37th President of the United States

But as any ne’er do well, the U.S. was writing bad checks.  The state was issuing more dollars than it could possibly redeem for gold at the promised exchange rate of $35 per ounce.

The rest of the world saw the U.S. money printing under the dollar/gold exchange standard and noted the falling purchasing power of the dollars they held.

They began to race for the exits. They wanted to cash their paper dollars in for gold while they could.

Like a run on the bank, the demand to exchange dollars for gold was beyond containment.  

Nixon decided to find a bogeyman to blame for the government’s wastrel ways.  He chose “international money speculators.”

The crisis of the U.S. writing hot checks was their fault, he said.

In making his case against them, Nixon uttered more monetary babble.  “The strength of a nation’s currency is based on the strength of that nation’s economy,” he said.  But that was simply untrue: America’s economy has been growing while the value of the dollar was sinking.  

And so, on that hot August night in 1971, Nixon closed the gold window and abandoned any pretense of dollar redeemability in gold.  

gold moves

That was 48 years ago today.  

Now we find ourselves on the doorstep of a long-brewing currency crisis.  With the dollar redeemable in nothing, what would act as a restraint on the issuance of more and more dollars, an endless torrent of money printing?

If the rest of the world noticed that they were having difficulty cashing in their dollars for gold decades ago, consider how they must feel today knowing that there is nothing to cash them in for.

We are speeding toward the long inevitable crisis of resolution.  On every hand, the central banks and governments of foreign nations, are taking steps to insulate themselves from the developing dollar crisis.  

Many central banks are using dollars to add to their gold reserves.  They may not mind fleecing their citizens with their own debased currencies, but they didn’t want to be victimized by ours 48 years ago.  And they still don’t want to be victimized by it today.  

And neither should you.


Release the IRS Kraken!

Sure, and drive everyone to gold and silver!

The Kraken, that giant sea monster of Norwegian myth, reappeared in popular culture with Pirates of the Caribbean and the Clash of the Titans movies.

Releasing the Kraken means to let loose destructive forces of immeasurable powers.

Now it looks like the Biden administration is prepared to set loose an IRS Kraken, 87,000 new IRS agents – many of them armed – to squeeze more resources out of the American people.  It is spectacularly bad timing as the people’s earnings aren’t keeping up with the cost of living and their savings are being devalued by inflation.

But there is more to the picture than just the financial squeeze.  At a time of record distrust and dissatisfaction with Washington, at a time of maximum social polarization, it is a move that will heighten all of that.

Stove-piping $80 billion to the IRS is but one component of the so-called Inflation Reduction Act of 2022.  “According to expert analysis,” writes Senator Ted Cruz, “it will supercharge the IRS with 87,000 new IRS agents to target Americans with 1.2 million new audits, more than half of which would be for people making less than $75,000 a year.”

Thanks to the Byzantine tax code, nosey auditors will be able to find something just about anywhere they turn.  And they will be armed, too.  Here are a couple of snippets from an IRS hiring ad: “min50 hours per week, which may include irregular hours, and be on-call 24/7, including holidays and weekends” and “Carry a firearm and be willing to use deadly force, if necessary.” 

Writing in the New York Post, Steve Forbes points out that the provision comes hard on the heels of the last IRS scandal This proposal comes just a year after the IRS’s latest scandal with agents illegally leaking the private tax returns of the wealthy.  But don’t think that the rest of the people will get off easy:

The plan is estimated to double the number of Americans audited each year. To quote the Church Lady from “Saturday Night Live”: “Well, isn’t that special?”

Most of the money raised from these audits won’t come from the superrich or multibillion-dollar corporations — both well-stocked with accountants and tax attorneys to fight IRS allegations.

Small-business owners and upper-middle-income workers will likely be the targets. The woman who runs an accounting firm or a restaurant won’t have the resources to fight the government in tax court.

Washington is releasing the Kraken because it is desperate.  Its currency is failing.  Foreign central bankers in China and elsewhere are de-dollarizing.  Elected officials are writing spending bills with no visible means of support.  And you don’t have to look under the carpets to see that people in high places are stealing everything they can get their hands on.

Time to refuse to be fleeced by Washington’s financial irresponsibility.  Speak with a Republic Monetary Exchange gold and silver professional and establish a plan to protect your family and your wealth.


Biden Announces Zero Inflation

He would know, wouldn’t he?

The President took to the podium on Wednesday (8/11) to announce a number: “Zero.”

Inflation was zero in July, he said.

You could count us among the surprised.  After all, we’ve been to the grocery store.  But who are you going to believe, the President or your lying eyes?

Then to add to the confusion, we read this morning that at the end of July grocery prices were up 13.1 percent from last July.  The price of eggs alone has nearly doubled and coffee is up $1.50 a pound.  

What a way to start the morning.  Makes it hard to enjoy breakfast.   

Still, the President has Bidenflation zeroed out.  We wish we could remember who said it, but someone on TV wondered why, with zero inflation, we need the Inflation Reduction Act of 2022 along with 87,000 more IRS agents.

Then someone else asked why shouldn’t we have zero inflation since despite two consecutive quarters of a shrinking economy we have zero recession.  

Next, while still choking down breakfast, we read that producer prices rose 9.8 percent for the 12 months ended in July.  Producer prices are wholesale prices.  They are soon going to show up in consumer prices.  And that’s not good.

So how does the President get his zero inflation bragging rights?  Simple.  Gas is down from its all time high of just a couple of weeks ago.  And why is gas down?  Because American families have had to radically adjust their gas consumption and driving.  That and the “zero recession” slowing economy.  

So other stuff is way up, while gas is down – no thanks to the White House, but due to a lowered standard of living.  And then we read that 30 percent of Americans are using credit cards and loans to meet their spending needs.  Even as the President and the Vice President are crowing about zero inflation.

What can you do?  Buy gold and silver while the Deep State Money Manipulators at the Fed and the spin people in the White House are on the loose.

And how was your breakfast?


Victory Over Inflation?

Right!  Wall Street Will Pretend Anything!

US inflation keeps running hot, with the headline Consumer Price Index for the 12 months ending in July up 8.5 percent.  

Lower energy prices contributed to the index easing off from the 40-year high of 9.1 percent reported in June.

Lower energy prices factored into the modestly lower inflation numbers.  Overall energy fell 4.6 percent led by gasoline which was down 7.7 percent.

Wall Street treated the lower CPI numbers like a long-term Federal Reserve victory over inflation.  Stocks surged across the board.  Never mind that an inflation rate of 8.5 percent would have been considered calamitous just six months ago.  Indeed, it would have been thought an impossibility a year ago.    

DOES THIS LOOK LIKE VICTORY OVER INFLATION TO YOU?

Wearing rose-colored glasses, Wall Street speculators leaped to the conclusion that with consumer prices coming in lower, the Federal Reserve will be less inclined to raise rates or to raise them as much at its September meeting.

More disciplined economic minds would not have reacted to the numbers with the same giddiness demonstrated by Wall Street traders.  Defining inflation strictly as an increase in the supply of money and credit, they would not have overlooked the trillions of dollars the Fed stovepiped into the American economy over the last few years.  They would have viewed the change in gasoline prices as simply a price change in one commodity, albeit an essential one.  And in the absence of a change in monetary conditions, they would have noted that the additional money that consumers were forced to pay for gasoline would be offset by lower savings or reduced spending on other goods and services. 

But it would not have changed their calculation of the inflationary shenanigans of the Deep State Money Manipulators.  And that clear-eyed assessment of the cause of higher prices could have guided policy changes to corral inflation and return to normal.

Unfortunately, people like Jerome Powell and Janet Yellen are not among those disciplined economic minds of days gone by.

That is why they can’t fix our monetary problems and why you must buy gold and silver to protect yourself.


Is the Bloodbath Over in the Stock Market?

The Federal Reserve has raised interest rates four times this year.  Fed officials are displaying a rare unanimity that more rate hikes are coming.  Higher mortgage rates have residential real estate reeling.  Inflation is at the highest level in 40 years.  The official GDP numbers say the economy has entered a recession. War drums are beating to our East and to our West.  

Of course, gold is inching higher day after day as money seeks a safe haven from the chaos.

So, is this really a time to be in stocks?  Is the bloodbath we have already experienced this year over?  Or is the stock bear market just pausing before the next round?

It looks like there is more carnage ahead in the stock market.  Here are a few snippets that we think confirm that outlook:

I expect the Fed to be behind the curve… it doesn’t really have a clue about market bubbles and the damage they do when they break.

–Jeremy Grantham interview, Investors Podcast’s 7/29/2022

It’s Happening: Here Is A List Of 12 Big Companies That Have Announced Layoffs Within The Last 2 Weeks:

#1 Ultratec Inc. says that it will be laying off more than 600 workers.

#2 Electric truck maker Rivian will be laying off approximately 840 workers.

#3 7-Eleven has announced that it will be eliminating 880 corporate jobs.

#4 Shopify is laying off about 1,000 people.

#5 Vimeo says that it will be eliminating 6 percent of its current workforce.

#6 Redfin will be reducing the size of its workforce by 8 percent.

#7 Compass will be reducing the size of its workforce by 10 percent.

#8 RE/MAX will be reducing the size of its workforce by 17 percent.

#9 Robinhood will be reducing the size of its workforce by 23 percent.

#10 It is being reported that Ford “is preparing to cut as many as 8,000 jobs in the coming weeks”.

#11 Geico has closed every single one of its offices in the state of California, and that will result in vast numbers of workers losing their jobs…

#12 Fender, the USA musical instrument giant, has reportedly laid off 300 California plant workers this past week without any notice or severance pay.

On top of everything else, Amazon has announced that it reduced the size of its workforce by approximately 100,000 workers in just one quarter.

–The Economic Collapse Blog. Com, 8/3/2022

The problem is that after a decade of deranged monetary policies that ultimately amplified speculation beyond 1929 and 2000 extremes, we are so far from “normal’ that arriving anywhere near that neighborhood will be a journey. The recent market decline has simply retraced the frothiest portion of the recent bubble, bringing the most reliable market valuation measures back toward their 1929 and 2000 extremes 

– John Hussman, Hussman Funds, 7/7/2022

Adjusted for inflation, 2022 first-half S&P 500 down 25-26%, and Nasdaq down 34-35%, Bitcoin down 64-65%.  That was multiple compression. Next up, earnings compression. So, maybe halfway there.

– “Big Short” Michael Burry, 7/30/2022

Stocks were in a primary downtrend from 1966 to 1982. Before that, the primary trend was up, from the bottom of the Great Depression until the mid-‘60s. The most recent bull market primary trend began in August of 1982 and continued until December of 2021.    

If a new, bear market primary trend has begun, we’ll see real values for stocks go down for many years. Few baby boomers will ever again see equities so richly priced as they were at the close of 2021….

A primary trend is relentless. And now, after 4 decades of rising stocks and falling interest rates, have we just witnessed the beginning of a new one?  Probably. Because, it’s about the money. The trend of the last 42 years was sustained by borrowing at lower and lower interest rates…with dramatic ‘saves’ by the Fed whenever a correction threatened. But those rescues are no longer possible.  

–Bill Bonner, Bonner Private Research, 8/2/2022

Take steps now to prepare for growing stock market turbulence in the remainder of 2022.  Speak with a Republic Monetary Exchange gold and silver professional without delay.


Inflation Isn’t For Everybody

Inflation is a problem for everyone. Over nine percent nationally.  Double digits in Phoenix.  Incomes aren’t keeping up with rising prices.  Plus rents are going up about one percent a month.

So, it’s a problem for everyone, right?

Well, not so fast!

It’s not a problem for me, says one senior official at the Federal Reserve, the institution that is the author of our currency’s destruction.

Mary Daly is the President of the San Francisco Fed.  In a Reuters interview, Daly explained that it’s not a problem for her.  Because she has enough:  “I don’t feel the pain of inflation anymore. I see prices rising but I have enough… I sometimes balk at the price of things, but I don’t find myself in a space where I have to make tradeoffs because I have enough, and many Americans have enough.”

Pretty cavalier, don’t you think?

Daly is paid $422,900 a year.  Not to mention medical, vision, and dental insurance.  Pension plans.  Private dining rooms.  Aircraft.  Cars and drivers.

Daly doesn’t feel your pain. She has enough. 

The sign at the front door of the SF Fed reads, “, “Our work touches every American and countless global citizens.” Yes, it touches them just like a pickpocket touches them, reducing the value of their savings without the benefit of public debate or legislation.

If you are not a Federal Reserve official and you believe that inflation is a problem, why not speak with a Republic Monetary Exchange professional?  Take steps today to protect yourself, your family, and your wealth with precious metals.  Fed officials like Mary Daly can’t print more gold and silver!


The Inflation Reduction Act

“Inflation Reduction”. Haha.

Since inflation is a deliberate policy of the monetary authorities when someone promises to do something about inflation we always look to see if they are talking about throwing the off-switch.

Are they talking about ending the artificial creation of money and credit by any of its thousands of names:  liquidity operations, Quantitative Easing, stimulating the economy, monetary injections, loosening credit conditions, fine-tuning the economy, repo operations, backstopping depository institutions, monetizing federal debt, and so on.

If they aren’t throwing the off-switch on all the foregoing, they aren’t stopping inflation.  

That’s why we had to laugh when we heard about The Inflation Reduction Act of 2022.  Ha ha ha!  Even the name is funny.  It evokes the names of other ridiculous federal legislation.  Sort of like calling a big tax bill The Universal Prosperity Act. 

How about these:

The Patient Protection and Affordable Care Act 

The Emergency Economic Stabilization Act

Or The USA Patriot Act.  Its real name is the Uniting (and) Strengthening America (by) Providing Appropriate Tools Required (to) Intercept (and) Obstruct Terrorism (PATRIOT) Act.

The Patriot Act doesn’t just torture American civil liberties and opens the doors to the total surveillance state.  It also tortures syntax in its clumsy search for an acronym.  

We’re not the only ones to see the irony.  Ron Paul, who spent years in Congress fighting this kind of nonsense, names it among The Most Inappropriately Named Bills.

Here’s Dr. Paul’s description of what the bill actually does:

The so-called Inflation Reduction Act increases government spending. For example, the bill authorizes spending hundreds of billions of dollars on energy and fighting climate change. Much of this is subsidies for renewable energy — in other words green corporate welfare. Government programs subsidizing certain industries take resources out of the hands of investors and entrepreneurs, who allocate resources in accordance with the wants and needs of consumers, and give the resources to the government, where resources are allocated according to the agendas of politicians and bureaucrats. When government takes resources out of the market, it also disrupts the price system through which entrepreneurs, investors, workers, and consumers discover the true value of goods and services. Thus, “green energy” programs will lead to increased cronyism and waste.

The bill also spends 80 billion dollars on the IRS. Supposedly this will help collect more revenue from “rich tax cheats.” While supporters of increasing the IRS’s ability to harass taxpayers claim their target is the rich, these new powers will actually be used against middle-class taxpayers and small businesses that cannot afford legions of tax accountants and attorneys and thus are likely to simply pay the agency whatever it demands.

Here’s our advice.  Until they quit the cutesy legislation and actually throw the switch and stop inflation, you should take steps to protect yourself with gold and silver.  

Because cutesy bills won’t prevent the US dollar from continuing to waste away.  


They Aren’t Buying What Washington is Peddling

The Gold and Silver Market Can See Right Through It!

We think it is worth going back thru what Washington has been peddling over the last week.

It starts with the Federal Reserve’s announcement on Wednesday (7/27) that it was raising its policy interest rate, the Fed funds rate by 75 basis points, or ¾ of a percent.

Wait just a runaway-inflation second here!  

Just weeks earlier the Consumer Price Index for the 12 months through June was reported.  It was up to 9.1 percent.  That is serious inflation by anyone’s standard.  In fact, it was well higher than the consensus forecast of 8.8 percent.  

In the Phoenix-Mesa-Scottsdale metro area, inflation spiked to 12.3 percent!

Accordingly, it was assumed in many quarters that at their July meeting the Fed would have to – would have to! – show its resolve and raise rates a full percent.  That’s because things were clearly spinning out of control!

But the Fed punted.  Chairman Powell announced a lesser rate hike.  

It looks as though the Fed isn’t really serious about corralling inflation.  So gold ticked up.

Then, the next day (7/28), the numbers came in on the nation’s productivity.  For the second quarter in a row, the US economy was contracting.  Another excuse for the Fed to shirk its responsibility to terminate inflation.  Gold ticked up again.

Then, the day afterward (7/29) another inflation report came out.  This is the one the Fed prefers to rely on (probably because it soft-pedals the extent of the problem).  This one, the Personal Consumption Expenditures index climbed more quickly than it has in 40 years, up a full one percent for the month of May alone.

So gold ticked up again.

Now Biden has a new bill with hundreds of billions of new taxes and spending.   

Here’s what makes the irony complete.  They are calling it The Inflation Reduction Act of 2022.  Of course, it won’t do anything to reduce inflation.  Even Wharton researchers at the University of Pennsylvania get that.  “Statistically indistinguishable from zero,” says the Wharton School study.

We think it will increase inflation.  It’s on a success track along with Biden’s deft Afghan withdrawal, or his claim that you can’t get Covid if you have the shot.  Maybe you remember “transitory inflation.”   Or its cousin “there is no recession.”

We’re in trouble.     

Time to buy gold.  Your best defense against Bidenflation.  


Yes, This is a Recession

Time to Get Up-To-Date on Gold and Silver!

Okay, we all know America’s economy isn’t what it was, thanks to the shutdowns,  trillions of dollars in “stimmies,” and Bidenflation.   But now it’s official:  We are definitely in a recession.

Well, check that.  We are definitely in a recession.  But it’s not really official until a board of bureaucrats says it’s official.  And they haven’t said yet.

We all pretty much know a recession when we see one.  It’s when the economy isn’t growing, it’s contracting.  Companies cut jobs.  People cut their spending for fear of the future.  They stop throwing money at silly things like NFTs (whatever they were) and amazing new crypto-currencies like $Cat and SpankChain.  And banks call some loans and make others hard to get.

We think we see a lot of these signs.  And now we learn that according to the official GDP numbers, the economy hasn’t been growing.  In fact, for the last two quarters it has been contracting.

We knew that before the numbers were reported.  How did we know?  We knew because the White House was spinning furiously in advance, denying that two consecutive quarters was a long-standing definition of a recession.  The White House had inside information that they were using, not for the good of the country, but to try to soften the public relations blow, and limit the eventual electoral damage of a recession developing on their watch.

They were trading on material inside information.  Not for stock market gain, but for political gain.  

Face it, the governing classes are stealing everything that isn’t nailed down.  Federal Reserve Board officials are implicated in trading on inside information.  The whole scandal appears to have disappeared.  The husband of the Speaker of the House just liquidated a huge position, selling $4 million worth of Nvidia stock at a major loss because the stench of cronyism and official inside dealing had become too much for even the lapdog press in Washington.

Martha Stewart went to jail for less.  

Anyway, gold went up on the bad news Thursday morning (7/28) that the economy is in a recession.  Why?  Because it means that the Fed is going to find itself printing more money sooner rather than later.  That is bad for the dollar, of course.  But it is good for people who invest in gold.

The day before, we watched as Fed chairman Jerome Powell announced a new Fed funds interest rate increase.  We watched gold go up then, too, because Powell is so transparent.  Faced with an opportunity to do some serious about inflation, he punted.  

Think about it.  The official US inflation rate is over 9 percent.  Powell raised the Fed policy rate to a target of 2.25 to 2.50 percent.  The Fed’s own interest rate is more than six percent below the inflation rate.  Stated differently, the Fed is keeping real interest rates negative.  And that is not how you wring inflation out of the economy. 

No wonder gold started moving back up.  

Have you spoken to your Republic Monetary Exchange gold and silver specialist lately?  This would be a very good time.


Interest Rates are Going Up in 2017

The Rate Hike

More Halfway Measures from Powell’s Fed; Nothing Gets Fixed!

The Fed says it is moving expeditiously to bring inflation down.  

You wouldn’t know it based on its latest move.  In fact, both gold and silver were so little impressed with the latest from the Fed that both jumped higher.

The Federal Reserve raised interest rates by three-quarters of a percentage point for the second straight meeting on Wednesday (7/27) in an attempt to get inflation under control.  

But inflation is roaring ahead anyway.  And the Fed’s half-hearted move is more politics than substance

After all, the inflation rate is 9.1 percent, while wholesale price inflation is over 11 percent.  

The last time we had inflation this high, the Fed had to raise interest rates above the inflation rate to get things under control.  

The Fed’s new move doesn’t even come close to doing that.  It has raised its policy rate, the Fed funds rate, from 2.25 – 2.50 percent.  The Fed would need to raise rates another 6.5 percent to implement the successful inflation-fighting strategy from 40 years ago.  

Meanwhile, big companies like Coke and Mcdonald’s, as well as others, are raising prices.  

Powell says the Fed will need to be “nimble” in its policy changes.  That means it has no clear idea where inflation comes from and what to do about it.  It means the Fed is simply going to be reactive to the economic numbers as they come in.  But the numbers once gathered are already history.  So, the Fed is constantly behind the curve of real events, always playing catch-up.  That explains why it is always surprised by real conditions, for example, its discovery that inflation did not prove to be transitory.  

Meanwhile, the Fed is hoping desperately that conditions normalize all by themselves.  It hopes that gas prices will fall, that harvests will be abundant, and that the supply chains will work themselves out.  Then the Fed can escape blame for its promiscuous money printing.  Its unhinged creation of $8 trillion dollars since the last market crack-up will be thought to have nothing to do with the dollar’s failing.

But nimble or no, actions have consequences.  And that includes legalized counterfeiting of dollars.  By printing and spending all that money, the Fed has enabled powerful claims on the future.  It spent money it didn’t really have.  That bill will be paid.

We hope you don’t find yourself victimized by the dollar’s coming deterioration.  Speak with a Republic Monetary Exchange gold and silver specialist today.


Banks vs. The People

Backed by Tanks, the Banks in China are Prohibiting Withdrawals!

It started in April when a few banks in China’s Henan province prohibited cash withdrawals.  

Now things have spread and escalated.  Hundred of thousands of people have been unable to withdraw their money.  In Zhengzhou, the provincial capital of Henan, the government has deployed tanks to the streets to intimidate depositors, with police violently dispersing others.  

Now the government is using the country’s health code to control protestors, down-grading their government health rankings to derail their travel and other activities.

There are other troubles brewing in China that are mostly off-the-radar screens.  One of the biggest is a growing mortgage boycott.  Here is a story from Bloomberg News on July 14:

“It is spreading like wildfire. Homebuyers in China are refusing to pay the mortgage on properties they’ve bought but that their financially strapped developers can’t finish. Some say that they will only resume payments when construction restarts… The frustrated buyers accuse the developers of misusing sales proceeds and the banks of failing to safeguard their loans. China has never seen anything like this. As in the US — until the 2007 subprime crisis — the possibility of troubles in the mortgage market was vanishingly small.”

There are a reported 100 million apartment units in China that are unoccupied.  Remember “jingle mail”?  That was the term in America’s mortgage meltdown for borrowers who walked away from their loans when their home values slipped below their mortgage debt.  They defaulted, left the house keys in the mailbox, and walked away, leaving the problem to the lender.  

As market values tumble below what is owed, the same sort of thing can happen in a way unique to China.  

China is buried in debt, which explains why its holdings of US debt has recently fallen below a trillion dollars.  The US can hardly afford to lose a leading creditor like China, but events in the credit market there are happening very fast.  Doug Noland who writes the Credit Bubble Bulletin says that credit conditions in China continue to deteriorate and that the “housing downturn is becoming only more deeply entrenched.”

What happens to the rest of the world if the second largest economy experiences a credit collapse?  We can say only two things:  1).  it will be like a nuclear bomb going off in the global economy, and 2).  you will be very glad you protected yourself with gold and silver.


Buried Treasures: They Don’t Make ‘Em Like They Used To!

Remember When Discovering a Buried Treasure Meant Instant Fortune and Riches?

Rich Gilson was doing some work on the driveway of his home in Wildwood, New Jersey a few weeks ago.  Digging around, he’s just hitting concrete and rocks when suddenly he strikes what he thinks are a couple of plant root balls.

So he tosses them aside.

Then he hits another one.  Now he’s curious and pulls at the edge of one.  “Hey,” he realizes, “This is money!”

Rich Gilson working at his home in New Jersey

Rich discovered rolls of $10 and $20 dollar bills wrapped up in brown paper, all from the same lot dated 1934.  

His “windfall” amounted to about $1,000.  

Rich suspects this was cash taken out of the bank during the Great Depression, a time when so many institutions were failing as a result.  Or to add to the intrigue of the story maybe it was from a bank heist? But most likely, given the sequential 1934 markings on the bills, odds are it was money pulled from the bank in desperation- a very common tale of the time.

We think it was probably a good idea for someone to take their money out of the bank back then, but even that forethought wouldn’t have been quite enough.  You see, US paper money has lost a lot of purchasing power since it was buried in 1934.  It would take more than $22,000 today to equal the purchasing power of $1,000 back then.  

That’s because the Federal Reserve has printed up a lot more dollars in the intervening years, making each dollar worth less.  

Whoever buried the money back then would have been much wiser to have buried $1,000 worth of gold.  A year earlier, in 1933,  President Roosevelt nationalized (stole) the peoples’ gold.   At the time $1,000 would have been 50 US $20 gold pieces.  The gold alone would have a current value of $92,500 at recent prices. Even if the coins were circulated from common usage, 50 $20 dollar gold pieces would be worth somewhere around $1,125,000 today.  And much more if they were in collectible condition. 

And by the way, since it was all just depreciating paper US dollars, Rich is not even going to bother to spend his “windfall.”  It’s not worth enough – he’d feel silly just spending it on a hoagie, he says – so he’s keeping it just for a conversation piece.  

So, we draw this conclusion from Rich’s story.  If you want to preserve your wealth, it is much wiser to do it in the form of gold, real money of enduring value.


The Strong Dollar?

You’ve Heard “The Dollar is Strong”. Ha-ha-ha!

We hear it all the time.  Sometimes all day long in the financial news media.  About the strong dollar.  Here are some examples:

“What the strong dollar means for Americans”  — The Hill

“The Dollar Is Extremely Strong, Pushing Down the World”  — NYTimes

‘What does a strong dollar mean for the US and world economics?”  — Marketplace.org

Although we have written about this before, the topic demands a re-visit.

Now we guess you can call it a strong dollar if you’re going to Europe on your summer vacation.  Or if you’re importing Mercedes.

But for the sake of clear communication, the term “strong dollar” should go in the deleted file.  Especially since most of us at any given time isn’t doing any of those things.

In fact, the dollar isn’t really strong at all.   It is weak.  Extraordinarily weak. 

That’s because the function of a currency is to allow people to purchase things.  With that in mind, here is a 10-year chart of the US dollar’s purchasing power:

You might notice the trend.  The best description is that dollar purchasing power is down, down, down.  In fact, the dollar’s loss of purchasing power has accelerated in the last year or two.

Here are the actual Consumer Price Index numbers for 2021 – 22.  They show for each month how much the price of consumer goods has increased over the prior 12 months.  It’s the inverse of the chart above.  


2021 (percentage increase)

  • Jan: 1.400
  • Feb: 1.676
  • Mar: 2.620
  • Apr: 4.160
  • May: 4.993
  • Jun: 5.391
  • Jul: 5.365
  • Aug: 5.251
  • Sep: 5.390
  • Oct: 6.222
  • Nov: 6.809
  • Dec: 7.036

2021 (percentage increase)

  • Jan: 7.480
  • Feb: 7.871
  • Mar: 8.542
  • Apr: 8.259
  • May: 8.582
  • Jun: 9.060

You might notice a trend there, with prices going up, up, up.  

No matter how you look at it, its not a good deal for Americans who earn paychecks, buy things, and try to save all in terms of US dollars.

So, if the people’s currency buys them less and less with each passing month, shouldn’t we drop the propagandistic term “strong”?

Because, after all, the dollar has never been weaker.  Period.  It buys less than it ever has.  Period.

And that should be nobody’s definition of strong.

Sophisticated financial writers and commentators may want to try communicating clearly, noting that for now, other currencies like the euro and the yen are actually losing value even faster than the dollar.

Isn’t that more accurate?  Can’t they do better?   

If you would like to get a clear description of current monetary conditions and how people protect themselves from inflation with gold and silver, speak with a Republic Monetary Exchange professional today.


The Bottom is In on Gold and Silver!

Precious Metals at Cost of Production? The Time to Buy is Now!

The correction in gold and silver that accompanied the panicked selling of stocks, bonds, and crypto-currencies this year is over, says Jim Clark, CEO of Republic Monetary Exchange.

“Both metals have found a bottom in this range,” according to Clark.  “Gold at $1700 and silver at $18 an ounce.”

Those levels represent the cost of production for the metals, he says. 

“You can go out at dig and try to find gold and silver, recover and refine them, and then mint and transport them at that price,” he says.

Jim Clark, CEO, Republic Monetary Exchange

“Or you can buy them at these prices with all that work already done for you.”  

Clark notes that the cost of mining has gone up.  “Mining is energy-intensive,” he notes.  “Higher fuel costs mean higher costs of production for both gold and silver.”

As often happens, according to Clark, Wall Street and other speculators sold gold for the cash they desperately needed as the stock and bond markets collapsed this year.  

“It’s a pattern we’ve seen before.  We’re confident that the global factors that drive precious metals higher, including war, government debt, and fear of recession are in place and that with the rising cost of production, both gold and silver are in an especially attractive zone for buyers,” he said.

With more than fifty years in the industry, Clark is one of the nation’s most experienced precious metals traders.  He is the founder and CEO of Republic Monetary Exchange in Phoenix, AZ.


US Inflation: It’s a Disgrace

In the Phoenix-Scottsdale-Mesa metropolitan area prices have climbed 12.3 percent! 

More news on the inflation front.  And it is bad!  

Consumer prices rose 9.1 percent nationally over the last 12 months.  

Those are the Bureau of Labor Statistics’ Consumer Price Index (CPI) numbers for the 12 months through June 30.  The national rate is up a full one-half a percent since the end of May.

The consensus guesstimate of economists was for the number to come in at 8.8 percent, but the White House already knew it was going to be worse and began trying to soft-pedal the bad news in advance.  

The Washington party line is that gas prices were at their highest in June and have since backed off so that the numbers should be lower next month.

That’s funny.  Last month they didn’t go out of their way to say that surging gas prices than would mean a higher inflation report for June. 

Why didn’t the Fed do something about inflation a year ago when the CPI was climbing at a 5 percent rate?  Former Fed chairman Ben Bernanke says it is because the Fed didn’t want to “shock the market.”

Well, how’s this for a shock?  12.3 percent inflation in Phoenix where Republic Monetary Exchange is located and so many of our clients live.

It’s a disgrace!

We think the real reason for the Fed’s foot-dragging on rising inflation is that it was stalling for time.  They thought rising prices were all the fault of supply chain problems, so they stalled and they stalled and they stalled.  Untreated, the problem grew worse.  Apparently, Fed officials didn’t think their creation of $8 trillion since 2008 would matter much.  Nobody had ever taught them the quantity theory of money.  Or much about supply and demand.  

Since consumer prices didn’t explode when Bernanke started Quantitative Easing, they seemed to think money-printing didn’t matter.

But that’s the stupidest thing since Dick Cheney said deficits don’t matter.

Money printing does matter.  The money-printing has been so enormous that it will change the US dollar forever.  And not in a good way.  Inflation this high makes things happen. We can’t foresee all of them, but here are a couple of possibilities:

  • With American families having to pay these fast-rising prices for necessities like gas and groceries, something else in the household budgets must give.  Things like leisure, restaurants, and travel are already weakening.  It’s like a door opening to a recession.
  • What about China (or America’s other foreign creditors)?  Are they going to watch their trillion-dollar portfolios get eaten up by the dollar’s collapsing purchasing power?

The possible consequences are grave.  No one knows what happens next, but it won’t be good.  Prepare yourself.  Gold is beckoning!


Dollar Falls With Blinding Speed

Consumer prices climb sky high!  Producer prices rising even faster!

We can’t help but laugh.  Maybe we shouldn’t laugh, but we do.  Every time the financial press and the mainstream media tell us how “strong” the dollar is these days!

For real people in the real world, this is the weakest the dollar has ever been.  Bought gasoline in the last couple of months?  How about food?  If so, you should know what we mean.  Your dollars just don’t buy as much.

In fact, the US dollar has never bought less!  It’s that weak!

Here are a couple of metrics.   According to the government’s own numbers, consumer prices have risen 9.1 percent over the last year.  The Producer Price Index, wholesale prices that are headed right your way, rose 11.3 percent over the last year.

Let’s be clear about what these number mean.  They mean the US dollar buys 9.1 percent fewer consumer goods than it did a year ago.  They mean that the US dollar buys 11.3 percent fewer wholesale goods than in did a year ago.  

These numbers mean that dollars – which people hold and save for one reason only, for what they will buy – are falling fast.  

The US dollar has never bought less!  It’s that weak!  Then maybe holding dollars, saving dollars, planning your retirement in dollars isn’t that great an idea, right?  

It’s true that with the recent bloodletting in stocks, bonds, and cryptos, desperate Wall Street speculators have had to sell gold to keep from going under.  Probably not much of it is what we think of as real gold.  It’s mainly paper gold:  title to gold that is presumably held intact somewhere but we’re not sure anybody knows, gold shares, ETFs, futures contracts.  As David Stockman puts it, they are whistling past the inflationary graveyard.  But they have to in order to keep afloat.   Good!  When they dump paper gold, it helps create a buying opportunity for us!  In real physical gold that actually exist and not just on paper.  You can take it with you?

So what’s with this strong dollar business that is all over the news?  It simply means that the dollar’s exchange value is somewhat high when compared to other currencies that are also losing value!

The Dollar Index that is referred to in these reports consists of half a dozen foreign currencies.  The Euro and the Japanese yen account for more than 70 percent of the index, and both the European Central Bank and the Bank of Japan have negative interest rates.  But saying the dollar is strong is like saying that the Titanic floats better than the Lusitania as they both sink!

In the meantime, the sky is the limit for gold.  These inflationary episodes often end with an angry public demanding an end to funny money and that real money – gold- backed money – be reestablished.  One writer noted the other day that based on the current money supply numbers (using M0 which is a measurement of cash), simply providing a 20 percent gold backing to the dollar would require a gold price of $7,500 an ounce.

But for now, be aware that the value, the worthiness, the purchasing power of US dollar has been falling at a speed that hasn’t been seen in more than 40 years.

The dollar has never been weaker!

Own gold?


More Loss and Pain Ahead for Stock Investors!

Regular readers know that we enjoy citing the market observations of Michael Burry.  

You probably remember Burry if you saw the 2015 movie The Big Short.  If you haven’t seen it, it is probably worth streaming just for an alternative look at how things work on Wall Street.  Burry, a real-life rock-drumming, hedge fund manager is played by Christian Bale.  When disaster struck the subprime mortgage market, Burry’s clients made about $700 million from his fund.  

In addition to warning about the real estate bubble, Burry more recently warned about inflation’s return while most of the financial establishments were in denial. 

Burry dubbed the Fed-inflated markets “Greatest Speculative Bubble of All Time in All Things.” Now with those bubbles popping and after all the carnage and mayhem suffered by stock and crypto investors in the first half of this year, Burry says there is more to come.

In fact, he suggests that the losses could double from here.

“Adjusted for inflation, 2022 first-half S&P 500 down 25-26%, and Nasdaq down 34-35%, Bitcoin down 64-65%,” Burry tweeted.  “That was multiple compression. Next up, earnings compression. So, maybe halfway there.”

Here are the bullet points Business Insider used to describe the latest from the Scion Asset hedge fund manager:

  • Michael Burry warned the plunge in stocks and crypto might only be at the halfway point.
  • “The Big Short” investors expect weak corporate earnings to fuel the next leg down in markets.
  • Burry predicts a slump in consumer spending will weigh on company profits later this year.

There is a little more detail in a recent piece by John Hussman, president of Hussman Funds, so we will finish with a couple of points from his recent client advisory letter

The danger for investors is that they have learned all the wrong lessons from this bubble. They’ve come to believe that valuations can be ignored, and that Fed easing is omnipotent. They’ve come to believe that “it always comes back.” They’ve learned to embrace passive investing, because they look back over their shoulder at prices that have gone nowhere but up, and conclude that attending to valuations would have been costly and useless. They’ve come to imagine that more risk means more return, regardless of the prices they pay to get in. All these misguided beliefs will be their undoing….

When the collapse comes (and I suspect it will), don’t blame Fed tightening for bursting the bubble. Once “bubble” is in hand, “burst” is inevitable. Blame the decade of reckless monetary policy that encouraged the bubble in the first place.

If you would like to avoid further losses in stocks, bonds, and cryptos, move to the safety sidelines no with a wealth-protecting gold and silver portfolio.  Speak with a Republic Monetary Exchange precious metals professional today.


Warning to the Fed Raising Rates

Unless they want to blow the federal budget to smithereens!

We wish the Federal Reserve hadn’t created all this inflation in the first place.  It’s decapitalizing America and making the people poorer.  So, we wish they hadn’t done it in the first place.

As long as we’re on the subject, we wish that Washington hadn’t spent the country into this deep debt hole, and then invited the Fed to finance the deficit by printing trillions of dollars.

But we are forced to live with their malperformance and irresponsibility.  So, the best we can do to protect ourselves is to buy gold and silver.

Meanwhile the Fed now apparently wishes it hadn’t created all this inflation, too.  Now it says it isn’t going to rest until it brings it back under control.  Now Chairman Powell says, “”We understand better how little we understand about inflation.”  

But we are at pains to understand the source of their confusion.  After all, inflation has been well understood for a very long time.  With hundreds of professional economists on the Fed’s payroll, couldn’t someone have explained what Germany’s central bank did a century ago when Powell’s counterpart, Rudolf von Havenstein, decimated the economy and radicalized the entire nation with runaway inflation?  Couldn’t one academic economist at the Fed have pointed to the precedent in Zimbabwe?  There Powell’s counterpart, one Gideon Gono, impoverished the country and made Zimbabwe a laughingstock with its extraordinary money printing.

So now the Fed is trying to unwind a little of what it has done.  “There’s a clock running here. The risk is that because of the multiplicity of shocks, you start to transition into a higher-inflation regime. Our job is literally to prevent that from happening, and we will prevent that from happening,” says Powell.  Its primary tool is raising interest rates.  It has done some of that already and promises another increase in the Fed funds rate later this month.

But there is a limit on how much the Fed can raise rates.  That is because the US government is the biggest debtor in the world.  As interest rates rise, it must pay higher rates to roll over its existing $34 trillion debt, not to mention the additional debt it piles on.  

With that prelude, we turn our attention to Jeff Deist, the President of the Mises Institute:

If Treasury rates continue to rise and rise precipitously, the effects on congressional budgeting will be immediate and severe. Even if we laughably assume total federal debt remains static at around $23.8 trillion (the publicly held portion of the $30 trillion), interest rates of merely 2 or 3 percent will cause interest expense to rise considerably. Average weighted rates of only 5 percent would cost taxpayers more than $1 trillion every year. Historically, average rates of 7 percent swell that number to more than $1.5 trillion. Rates of 10 percent—hardly unthinkable, given the Paul Volcker era of the late seventies and early eighties—would cause debt service to explode to over $2.3 trillion….

Everyone knows the US will never pay its debts except nominally through inflation; everyone knows off-balance sheet entitlement promises cannot be kept in any meaningful way. Spendthrifts get cut off eventually.

Stated differently, there is no way out.  If the Fed doesn’t try to rein in inflation, it will destroy the dollar, the capital markets, and the resilience of the US economy.  It does try to rein in inflation by raising its policy rates and reducing its holding of bonds, it will drive rates to the moon and bankrupt the Treasury.

Oh, we wish they hadn’t started this fiat, unbacked money nonsense.  But people of sound mind who examined the historical precedents (We’re looking at you Zimbabwe.  And you Germany.  And France and Venezuela and hundreds of other monetary fraudsters!) knew that no good would come of it.  And they said so.  Over and over.

Have you spoken with a Republic Monetary Exchange gold and silver specialist?  It would be a good idea to do so right away.

Interest on debt in the hands of the public at different interest rates (billions)

Total debt in the hands of the public$23,874. 2
Interest rateInterest expense
1%$238.70
2%$477.50
3%$716.20
4%$955.00
5%$1,193.70
6%$1,432.50
7%$1,671.20
8%$1,909.90
9%$2,148.70
10%$2,387.40

Fed Still Concerned About Entrenched Inflation

50 or 75 basis point rate hike later this month?

Just released minutes from the Federal Reserve Board’s June meeting which saw the Fed’s key policy rate hiked by 75 basis points (3/4 of a percent) show the Fed remains concerned about entrenched inflation.

To no one’s surprise, the minutes foresee another Fed rate hike in late July: “Participants judged that an increase of 50- or 75- basis points would likely be appropriate at the next meeting.”

The Fed does not want to appear weak or to have already lost control of its reversal on inflation.  A week ago, Chairman Powell repeatedly voiced an anti-inflation resolve: “The process is highly likely to involve some pain, but the worse pain would be in failing to address this high inflation and allowing it to become persistent.”

Even so, with the increasing likelihood that the US is already in or is entering a recession and with consumer spending slowing, the question is already being asked how long that resolve will last.  Will the Fed raise the Fed Fund’s rate an additional 50- or 75-basis points this month?  Or will it pause?

Fed watchers go carefully through the minutes of each meeting when it is released weeks after the fact, looking for clues.  Here is what they found: “Participants concurred that the economic outlook warranted moving to a restrictive stance of policy, and they recognized the possibility that an even more restrictive stance could be appropriate if elevated inflation pressures were to persist.”

We don’t find much to go on there.  Most market participants seem to expect the larger Fed Funds rate hike.  But we are always perplexed by what the Fed does and doesn’t do and we don’t mind admitting it.  For example, during the recovery from the Great Recession, the longest expansion from a recession in history, one that lasted 128 months, the Fed kept gunning money and credit conditions along the way, even though doing so was utterly unnecessary, even by the standards of the Fed’s own Keynesian philosophy. 

As a consequence, we will let others mine the minutes and parse official comments looking for a key to future monetary developments.  We’re not much interested in the short-run trading momentum – except for our thanks that Wall Street has given us a great gold buying opportunity!  

But for us, we see what the Fed has done and what must happen as a consequence.  From 2007 as the Great Recession was getting underway, until today, Fed assets (reflecting its creation of made-up dollars, unbacked by anything) grew from $800 billion to $8.9 trillion.  That’s an increase of 1,100 percent.  

That’s a lot of made-up funny money.  It means those dollars will buy far less down the road, including far less gold.  And if the Fed raises rates much more, as it may, it will soon make the interest cost of $34 trillion in US national debt the next big crisis.

Buy gold and avoid all the hysteria.  And the sure-fire dollar crisis.


First Half of 2022 Grim for Stocks, Bonds, and Crypto

Gold Holds Its Own; Silver Demand “Insatiable”!

Between inflation in double-digit neighborhoods and a dark-robed creature named Recession knocking on the door, 2022 has been a tough year for stocks, bonds, and crypto-currencies. 

It doesn’t help that the year is only half over.

A few first-half numbers:

The S&P 500 tumbled 20.6 percent, the worst start for a year since 1970;

The DJIA fell 15.3 percent, the worst start since 1963;

The Nasdaq fell 29.5 percent, the worst start in its history;

Bitcoin fell below 20,000, quite a collapse from 67,000 just eight months ago.  The Wall Street Journal’s description was vivid: “Crypto’s rocket ship to the moon crash-landed back on Earth in the second quarter”;

Mortgage rates have risen to multi-year highs.

We don’t normally spend a lot of time on technical analysis, but we want to show you a quick series of charts.  First the Dow Industrials:

 Next the S&P 500:

The Nasdaq Composite:

Despite the carnage and bloodshed, and with Wall Street speculators and hedge funders selling “paper gold” vehicles like gold shares and ETF to meet margin calls and keep their doors open, gold itself managed to hold its own and finish in the black during some of the worst market turbulence since Richard Nixon was president.  While virtually everything else was dripping red ink, gold, which closed on the first trading day of the 2022 at $1,800, finished the first half virtually unchanged (in fact just slightly higher) at $1,807.  

No wonder people look to gold for wealth preservation!

Meanwhile we remind you the Goldman Sachs is projecting gold to finish this year six months from now at $2,500 and that the US Mint continues to point to record sales of its real gold, physical gold products like American Eagle gold coins, while leading precious metals research consultancy Metals Focus in London, calls US demand for retail silver investment products “almost insatiable.”

It looks to us like the pain on Wall Street is just getting started.  We find it easy to take Goldman Sachs’ projection for much higher gold quite seriously.  After all, we have lived through these inflation and market crises before!  So many of the same mistakes are beging made, only this time they debt and money-printing are measure not in billions, but in trillions.


Now Introducing… Skimpflation!

Everybody knows about Shrinkflation… but have you heard about Skimpflation?

By now, pretty much everybody knows about inflation.  It’s hard to miss at the gas pump or at the grocery store.  Prices are up everywhere on just about everything.

The government says the official inflation rate is 8.6 percent.  By that they mean that at the end of May, the average price on consumer goods was 8.6 percent higher that it was at the end of May 2021.

Since inflation is a monetary phenomenon, we prefer to describe it this way:  It you had $100,000 in your mattress or in the bank for the last year, today it only buys you $91,400 worth of stuff.  

The collapsing purchasing power of the dollar is easy to see in this chart from the Federal Reserve:

We, of course, think the government’s inflation number are way off.  In fact, it has devised a number of ways to soft-pedal the real inflation rate. 

We don’t feel sorry for the government taking the blame for inflation since it is the responsible agency.  But we feel a tiny – very small – bit of sympathy for the businesses that have to pass higher prices along to their customers.  Our sympathy for them is moderated by the knowledge that America’s largest businesses had the collective political clout to do something about the destruction of the dollar… if they had wanted to.  

But they didn’t want to.  Most thought inflation was either just a minor nuisance or an actual benefit to them in some way. 

In any case, businesses have resorted to the incredible shrinking candy bar tactic to avoid being the bearers of bad price news.  Today we call their practice shrinkflation.  Trying to hide rising prices, manufacturers reduce package sizes.  Cereal boxes look the same size on the shelf, but they’re narrower and hold less. Toilet paper rolls shrink.     

But have you heard of skimpflation?  It is like shrinkflation, but involves a deterioration in quality, instead of size.  If a product once came assembled, now you have to assemble it yourself.  It had a one-year warranty, now it may have only 90 days, or even no warranty at all.  Furniture that was made with durable hardwood is now mostly particle board.  Once upon a time a server brought food to your table.  Increasingly now, you have to go pick it up yourself.  Skimpflation.

A former Bank of England official describes it this way in The Guardian: “I remember it from many years ago: the price of socks remained the same and, as costs changed, the thickness of the sock changed. I don’t know how big a deal it [skimpflation] is … I’d ask a different question: to what extent does inflation measure things properly?”

Skimpflation or shrinkflation – either way, you get less for your money.  Consumers need to realize that it reflects the currency being debauched by the monetary authorities.

Don’t let skimpflation or shrinkflation erode your standard of living.  Don’t let inflation destroy your savings and your wealth.  Speak with a Republic Monetary Exchange gold and silver professional today about a sensible plan to shift out of eroding currency and into the enduring money of the ages.


Goldman Sachs Raises Its Gold Price Target

The investment banking giant is predicting $2,500 this year!

Goldman Sachs, the multinational investment banking firm, has raised its 2022 year-end gold price forecast to $2,500.

The company explained that increasing prospects of a recession could power the move.  It noted that inflation is likely to remain an important factor in the gold price for the rest of this year.

Goldman Sachs explained, as we have repeatedly, that gold has no liabilities.  It is not dependent on someone else’s promises or performance but is a monetary asset in its own right.  This is especially important in times of economic turmoil.  Of course, that descsription only refers to physical gold in your possession.  The safety and assurances that most investors seek from gold is not part of investments in “paper” gold, such as gold shares, ETFs, commodity contracts, or promissory notes.

Gold Sachs year end target price of $2,500 represents an increase in the second half of this year of of more that 37 percent from the recent gold price.

Meanwhile, Metals Focus, the prestigious London-based independent precious metal research consultancy, reports that the US continues for second year to be the largest destination for Swiss silver bullion.  It says that shipment reflect the “almost insatiable demand” in the US for retail investment products.  

Prepare yourself for more Bidenflation and the second half or 2022.  Speak with us at Republic Monetary Exchange today about wealth preservation and profit with gold and silver.


Americans See the Light On Inflation

Ronald Reagan had a great line (actually he had a lot of good lines).  He once said, “When I feel the pain, I see the light.”

The American people have been feeling plenty of pain from Biden inflation – pain at the gas pump, pain at the grocery check-out line, pain that their pay isn’t keeping up with inflation.  

But at least many of them are at last beginning to see the light.  

Despite all of the President’s finger-pointing and blame-shifting, a new poll (I&I/TIPP) finds that 64 percent identify Biden as responsible for “causing the current inflation.”  Responses ranged from “very responsible” (38 percent) to “somewhat responsible” (26 percent).

Democrats aren’t letting Biden off the hook, either.  The Poll reveals that 53 percent of Democrats blame Biden for today’s inflation.

Drilling down a little closer provides more encouraging news.  More than two out of three surveyed say that excessive government spending “worsens inflation.”

The poll’s sponsors write that the questions asked, “came in response to recent White House claims that uncontrollable forces outside of their policies were to blame for the upsurge in inflation.”

“Biden and his spokespeople have steadfastly denied any responsibility for the surge in inflation and said a recession was ‘not inevitable.’”

The gold and silver professionals at Republic Monetary Exchange have been warning you about all of this loud and clear… about Washington spending, money printing, and Bidenomics!

And now it’s front and center in your life, impossible to miss at the grocery store and at the gas pump.

Don’t wait for Biden to protect your hard-earned money.  Talk to a Republic Monetary Exchange professional today about a sensible precious metals portfolio.  Because in troubled times and in a currency crisis, nothing outperforms gold and silver.  


Seeing is Believing

You know inflation is higher now than it has been in the lifetimes of most Americans.  Gas prices have gone stratospheric, food prices are soaring, consumer confidence is in the tank, interest rates have home buyers and sellers angry, and a recession is knocking on the door.  

But there is nothing like seeing it in living color and in motion graphics!  See for yourself!

President Biden seems to believe that his popularity has less to do with objective real-world conditions than with his staff’s ability to communicate all the wonderful things happening under his leadership.  We know POTUS doesn’t pump his own gas or do his own grocery shopping.  So maybe someone ought to help him get the picture and show him this graphic!

As for the rest of us, those of us who do pump our own gas and do our own shopping, we’ve gotten the message:  inflation is not a matter of perception.  Pardon us if we protect our wealth and profit with gold and silver!


Ron Paul Says…

Fed too late, too little!

It was just weeks ago that Federal Reserve chairman Jerome Powell said that raising interest rates 75 basis points at its June meeting was something that wasn’t under consideration.

BANG!  The Fed raised interest rates 75 basis points at its June meeting after all.  And it will likely do so again at its July meeting. 

But after 14 years of pumping money into the economy by the trillions, are a couple of interest rate hikes that still leave the Fed funds policy rate (now 1.50 to 1.75 percent) about seven percentage points below the inflation rate (now 8.6 percent), enough to do what Paul Volcker did 40 years ago when he drove interest rates to double-digits?  Is it enough to wring inflation out of the economy?

Can the Fed stop inflation with baby steps and halfway measures and thereby avoid crushing employment and throwing the economy into a recession?

Are we headed for a soft landing?  Or a crash landing?

Monetary authority Dr. Ron Paul says a soft landing is highly unlikely:

This latest rate increase will only raise rates to where they were before the lockdowns led the Fed to embark on a historic money-creating spree. The Federal Reserve cannot increase rates to anywhere near the level they would be in a free market because doing so would increase interest payments to unsustainable levels for debt-ridden consumers, businesses, and the federal government.

Increases of a couple percent or less in interest rates can cause big increases in federal debt payments. The resulting new spending puts pressure on the supposedly “independent” Fed to maintain low rates, making it more likely the Fed will fail to tame inflation but succeed in resurrecting stagflation, combining price inflation with a recession. This new stagflation will make the 1970s look like a golden era.

A lack of serious intent and pussy-footing approaches to today’s destructive inflation rates can only mean that inflation will persist.  And, as the stagflation experience of the 1970s showed, a persistent inflation is enough to power to unforeseeable new heights.

Dr. Paul points to another consequence of a coming bout of stagflation, one that we have called one of the most important monetary megatrends of the day: the ending of the dollar’s post-war reserve currency status.

Says Dr. Paul, “The return of stagflation will increase the growing movement to replace the dollar as the world reserve currency. This will be the final nail in the welfare-warfare-fiat money regime’s coffin.”

The preceding commentary is provided to encourage readers to assure that their gold and silver holdings are sufficient for the monetary turmoil ahead!


One Chart to Explain it All

(With apologies to J.R.R. Tolkien and his famous line from The Lord of the Rings, “One ring to rule them all.”)

We have published this chart before, but it tells the story of gold’s rise overlaid against the dollar’s loss of purchasing power so completely that we present it again with no commentary.

 Okay, one little bit of commentary.  We just saw this talk, apparently to a Rotary Club, by the chairman of the House Budget Committee, Kentucky Congressman John Yarmuth.  

While the above chart displays the result of US monetary policy, in this you will see how the US ended up with $30 trillion in unpayable debt.  Here is a link to the 2021 video in which Yarmuth says that “We don’t really need to pay for Federal spending or debt. We are like the banker in monopoly,” he explains.  “We create the money.” 

And he’s the Budget Chairman.  

That explains a lot.     

We will leave matters there without any additional commentary.


Bidenomics Up Close

No Wonder People Are Buying Gold and Silver!

“Their need for mental health in America has skyrocketed,” says President Biden.

The people should always have mental health.  Of course, what Biden actually means is that the need for mental health care in America has skyrocketed.  

Actually, what the people need most is a break from the confusion and chaos coming at them from the top.  People always need clarity.  They can’t be expected to function optimally in an environment of deceit.  But deceit and confusion are coming at them at breakneck speed from Washington.

When you gas up this weekend, do the grocery shopping, or check your 401k, you might want to consider the words of Karine Jean-Pierre, the president’s spokesperson:

 The US economy “is in a better place than it has been historically.”

 She actually said that but she’s new and she’s like the old RCA Victor ad called “His Master’s Voice.”  She’s only expected to repeat what her masters say, so we won’t dwell on her.  

But the president is another story.  So today we turn to what Biden says about economic matters with the help of the great reporter James Bovard and a recent piece in the New York Post called “Debunking 10 of Joe Biden’s lies about the state of the US economy.”

You can read the entire list HERE, but we’ve selected a few snippets:

CLAIM: Biden boasted that he “put America in a position to tackle the worldwide problem that’s worse everywhere but here: inflation.”

REALITY: Were Biden’s speechwriters using “Common Core” math that makes all bad numbers vanish? Inflation is 8.6% in America and 5.4% in South Korea, 5.1% in Australia, 6.8% in Canada.

CLAIM: Biden continued blaming Russian President Vladimir Putin for price hikes here in America.

REALITY: National Public Radio reported earlier this year that “between 2019 and 2021, the US saw one of the biggest inflation-rate increases in the world, behind only Brazil and Turkey.” Inflation had increased fourfold under Biden — reaching 7% — before Russia invaded Ukraine. Wholesale price inflation last month was almost 11% — signaling worse times ahead for US consumers.

CLAIM: Biden apparently thinks that public raving can restore confidence in his leadership. He literally screamed at the AFL-CIO audience: “I don’t want to hear any more of these lies about reckless spending. We’re changing people’s lives!”

REALITY: Federal Reserve analysts estimated that Biden’s deluge of handouts added 3% to the inflation rate by late last year. The Federal Reserve has boosted the money supply by 40% since the start of the pandemic, helping fuel price surges across the board.

CLAIM: Biden claimed that he had “created the greatest job recovery in American history. … Since I’ve become president, we’ve created 8.7 million new jobs in 16 months.”

REALITY: Does it count as a “new job” if it was “created” solely because politicians ceased prohibiting people from going to work? Almost all of the Biden “success story” is simply jobs returning from the pandemic shutdowns and disruptions. According to Statista.com, nationwide employment this year will be roughly the same level as 2019.

There is much more, but we think this makes the point.  If you had such confusion issuing from the top levels of your government, wouldn’t you be buying gold and silver for protection from the chaos?

We would too.


The Federal Reserve Clown Show

The dollar, like all unbacked paper and digital money, is a confidence game.  That’s why we are watching the Federal Reserve with horror.  Behind the curve doesn’t begin to describe it.

It’s a clown show!

It’s almost as if they are trying to destroy confidence in the dollar.  But whether they are doing it on purpose or just lurching about in their confusion doesn’t matter right now.

Consumer confidence is in the tank.  The University of Michigan’s consumer confidence index for June is at an all-time low, mostly due to inflation.

We don’t think anyone should be surprised.  Just weeks ago, chairman Jerome Powell scoffed at the idea of the Fed needing to raise interest rates 75 basis points (three-quarters of a percent).

Yet this week the Fed did just that.

That comes hard on the heels of former Fed head Janet Yellen explaining that she just didn’t really understand inflation.  But none of them do.  It’s as though Fed officials have never heard of the quantity theory of money – the more dollars they print, the less each is worth.  It’s as though they’ve never really mastered supply and demand.

So now while the American people are suffering pain at the pump and America itself is being decapitalized, the Fed keeps stalling for time.  Instead of taking serious measures, it hopes that inflation will disappear on its own.  For example, the Fed has said it needed to unwind its balance sheet, to undo some of the $8 trillion it has printed in the last 14 years.  But if it is important to do that, why are they stalling?  If it will help, why didn’t they start right away?  They have no sense of urgency.  They don’t pump their own gas.  They dine for free in the Marriner Eccles building dining room.  So now they are finally dipping their toe into the unwinding process but won’t really ramp up until this fall.  Mañana, mañana, mañana.  

While the Fed dilly-dallies, blood is running on both Main Street and Wall Street.  Inflation keeps ratcheting up, up, up.  Producer prices are rising at double-digit rates.  Mortgages rates have doubled, leaving both home buyers and sellers in a lurch.  And the stock market has lost $11 trillion already this year.  

It’s a clown show, that’s for sure.  Don’t be victimized.  If you haven’t moved a substantial share of your assets into gold and silver, it’s certain you will continue to be victimized by fiat, made-up, unbacked paper or digital money.  

The clown show will make you poorer.


Political Policy Confusion

The US economy “is in a better place than it has been historically.”

So says President Biden’s press secretary Karine Jean-Pierre from the White House briefing room.  And we thought Powell and Yellen were confused.

It is said that a diplomat is a person paid to lie for their country.  But they can’t hold a candle to presidential flacks. 

Only a flack or a sociopath could look you straight in the eye at telling you that we’re in a better economic position than ever before.  Obviously, Karine Jean-Pierre doesn’t pump her own gas.  

 “We are in a good position to take on inflation,” she announced.  “We are in a good position to really start working on lowering prices.”

Right.  One of the reasons White House aides are so shameless in defending their boss is that he has switched gears.  He was blaming corporations and Russia for inflation.  Now he has switched to blaming his PR people for not doing an adequate job defending him.

But in any case, we don’t need to “take on” inflation.  We need the monetary authorities to refrain from inflating.  But it’s a little late for that.  The $8 trillion in funny money they conjured up out of thin air in the last 14 years is going to exert its cost.  

But if they truly believe the economy is in a better place than ever in history, why don’t they leave things alone and they can bask in their success?

Because, as we all know, the economy is on the verge of something very unpleasant.  You don’t have to be skilled at reading between the lines to know that they are ready to make everything worse.

Would you like an example?  Here’s one from the popular financial blogger Michael Shedlock:

Last September, 20 House Democrats introduced the Fossil Free Finance Act, which would require the Federal Reserve Bank to take steps to stop banks from investing in fossil-fuel production. The bill’s goal was “no financing of new or expanded fossil fuel projects after 2022,” the Naderite group Public Citizen noted approvingly.

Sticking with $5.00 plus gasoline, someone wrote a piece in the Wall Street Journal called “Why Energy Companies Won’t Produce.”   Simple.  It’s because they expect the war on fossil fuels to resume when the current crisis ends.  Here’s a snippet:

President Biden has urged oil and natural-gas companies to ramp up production, and you’d think, given the current high prices, that it would be in their interest to do so. But the industry has been slow to respond, with some justification. Companies expect that as soon as the current turmoil subsides, the Biden administration will shift back to hostile rhetoric, anti-energy legislative proposals, and oppositional regulatory policies.

Just remember that the same confused philosophies, policymakers, and presidential appointees who have made a trip to the gas station a heart-stopping experience have been subverting the value of our money for a very long time.  

We say get out of their way.  Preserve your wealth with gold and silver and do it now.  Because the proverbial chickens are coming home to roost.

You need to own gold and silver because Washington remains as confused as ever!


How is Janet Yellen Getting Away With It?

Why is Janet Yellen Treasury Secretary?

They get away with it for a while.  Then when the consequences hit, they duck, bob, and weave desperately to try to avoid blame for their policies.

“Deficits don’t matter,” said Vice President Dick Cheney.  

That was in November 2002.  The national debt was $6.325 trillion.

Today the national debt is $30.420, almost five times the size.  How did it get so large?  Because of the accumulation of Cheney’s “don’t matter” deficits year after year.  

So, deficits decidedly do matter. 

Janet Yellen, the former chairman of the Federal Reserve insisted that rapid growth of the money supply would not lead to inflation.  The old verities about debt and money printing were outdated, she said.  So, inflation was “manageable,” “small risk,” and “not a problem,” she said.

No wonder the Fed created $8 trillion since 2008.  The old verities had been overruled by geniuses named Yellen, Powell, and Biden.

Except that now we have the highest inflation in most people’s lifetimes.  And record-high gas prices.  And sharply higher mortgage rates slamming both buyers and sellers.

So now that the inflationary cow is out of the barn, Treasury secretary Yellen is on an apology tour confessing that she did not “fully understand” inflation.

Then why should she be the Treasury secretary?

Yellen’s tune has changed.  “I do expect inflation to remain high, although I very much hope it will be coming down now.”

She hopes?  Do we get the foolish drug of “hopium” in the place of badly needed insight?  That’s Yellen for you.  Five years ago, she shared her hope for the rest of our lifetimes and her doubt that there would ever be another financial crisis:  

“Would I say there will never, ever be another financial crisis?” Yellen said.  “You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be.”

More hopium.  More ungrounded beliefs.

The truth is that inflation has been understood for centuries.  It is the destruction of the purchasing power of the currency.  

We warned you about it while the money printing splurge was going on.

Now there’s a hurricane headed your way.  Preserve your wealth from the mismanagement of our money by Yellen and Powell.  Protect yourself from Biden inflation with gold and silver.

Speak with a Republic Monetary Exchange gold and silver professional today.   Before the next shoe drops!


Biden Respects the Fed

We respect gold and silver!

We have the worst inflation in decades.  It is pounding the stock market.  It is whipping the bond market.  Mortgage rates are climbing fast to the dismay of both home buyers and sellers.  It is draining household budgets with every stop at the gas station.

And President Biden says the answer is to respect the Fed?  Who, pray tell, is responsible for the appalling state of our money, the US dollar?  Perhaps the monetary authorities, the Fed, might have something to do with it?  

And if not they, who?

Biden says that part of his job is to nominate people for the Fed and to “give them the space they need to do their job, not interfere with their critically important work.”  Indeed, it is Biden who reappointed Fed chairman Powell to a second four-year term.  

A bi-partisan Senate vote just last month confirmed Powell’s new term.  

That’s funny.  Despite his cluelessness about the advent of trouble — the US inflation rate was over 8 percent – Senators by a vote of 80 to 19 thought it best to continue entrusting our monetary affairs to Powell.  It reminds us Janet Yellen.  She admits she didn’t get it about inflation either – as she didn’t get it about most things while she was with the Fed – but that’s good enough for her to be US Treasury secretary.

Biden went out of the way to mention that his respect for the Fed is unlike that of his predecessor Donald Trump.  What did Trump do?   He sent some mean Tweets about the Fed.

Mean tweets?  Oh, my!

Congressman Ron Paul writes that presidents have tried to have a hand in monetary policy for a very long time:

It is hard to believe that someone who has been in DC as long as Joe Biden really thinks Donald Trump was the first President to try to influence the Fed’s conduct of monetary policy. Since the Fed’s creation, Presidents have used public and private pressure to “convince” the Fed to tailor monetary policy to advance their policy and political goals. When it comes to “demeaning” the Fed, Trump has nothing on Lyndon Johnson, who, frustrated over the Fed’s refusal to tailor monetary policy to finance the Great Society and Vietnam war, threw the Fed chairman against a wall.

By “passing the buck” on inflation, Biden no doubt hopes to deflect blame from himself and his party before the midterm elections. Unlike Biden’s previous inflation scapegoats — greedy corporations and Vladimir Putin — the Fed actually is responsible for creating and controlling inflation….

Treasury Secretary and former Fed Chair Janet Yellen and Chairman Powell have both admitted they were wrong to publicly dismiss inflation as “transitory.” The fact that the two most recent Fed chairs made such a huge blunder (or purposely refused to admit what was clear to many people for over a year), shows the folly of relying on a secretive central bank to manage monetary policy. Instead of “respecting the Fed’s independence,” President Biden should work with Congress to audit, then end the Fed.

The continuation of Powell and Yellen in positions of authority reminds us of the old expression that if you keep on doing what you’ve been doing, you’re going to keep on getting what you’ve been getting.

President Biden can respect the Fed if he wishes.  As for us, when it comes to money, we respect gold and silver.


American Gold Coin Sales Through the Roof

Investors are turning to Gold Eagles in the Bidenflation era!

Thanks to sky-high inflation, the US getting deeper into a European war, gas prices at all-time highs, and possible food shortages in development, Americans in big numbers turned to US American Eagle gold coins for safety.

In May, the US mint sold 147,000 ounces of American Eagle gold coins of various denominations, but mostly the popular one-ounce denomination.  That represents a 67 percent increase from April sales, and an impressive 617 percent increase from May 2021 sales totals.

So far in 2022, US Mint Gold Eagle sales have totaled 661,500.  That’s an increase of 40.5 percent for the same period in 2021.

American Gold Eagle coins are the world’s foremost bullion coins with more than 22 million ounces sold since 1986.  The US Mint describes bullion coins this way:

A bullion coin is an investment-grade coin that is valued by the weight and fineness of a specific precious metal. Unlike commemorative or numismatic coins valued by limited mintage, rarity, condition, and age, bullion coins are purchased by investors seeking a simple and tangible means to own and invest in the gold, silver, platinum, and palladium markets.

American Eagle Gold Bullion Coins are available in four sizes: one ounce, one-half ounce, one-quarter ounce, and one-tenth ounce. American Eagle Silver, Platinum, Palladium, and American Buffalo Gold Bullion Coins are available in one-ounce sizes.

To invest in American Gold Eagle coins and other popular gold and silver wealth preservation products, speak with a knowledgeable Republic Monetary Exchange advisor today.


How to Brace for a (Financial) Hurricane

“It’s a hurricane. That hurricane is right there, down the road, and coming our way.”

So says Jamie Dimon.  He’s the head of JP Morgan Chase, banking’s most influential figure.

“You better brace yourself,” warns Dimon.  

Now that you’ve heard from the C-suites, let’s go down to the field to see what they are saying.

“People don’t realize what’s fixing to hit them,” said Texas farmer Lynn “Bugsy” Allen.  “They think it’s tough right now, you give it until October. Food prices are going to double.”

From the high rises of Manhattan to rural Texas, the stagflation threat grows clearer every day.  Manufacturing employment looks to have already begun sliding.  Price inflation remains high.  

Food prices are taking even more of the household budget.

And the war in Ukraine, responsible for today’s higher energy prices, could send prices even higher.  Dimon says we could see oil soar to $150 or $175 a barrel.

The Wall Street Journal estimates that higher gas prices are already costing the American people an extra $2000 a year.  

Higher oil prices mean even higher food prices, too.  “They have no electric trucks delivering that food and there are no electric tractors,” Allen said.  “It takes diesel to run all this.”

So how do you brace for a hurricane?  You’re not a multi-national financial institution.  You can’t call loans to troubled borrowers.  You can’t just raise rates on hopelessly indebted credit card customers.  And you sure as heck can’t borrow money from the Fed at crony below market rates.  You’re probably not on the special list of those who get bailed out by congress, either.

So how do you brace for a hurricane?  Get out of the Fed’s failing money.  Just the other day former Fed chairman and current Treasury secretary Janet Yellen confessed that she had been wrong about the whole inflation thing.  “I was wrong then about the path that inflation would take,” she said. “As I mentioned, there have been unanticipated and large shocks to the economy…that I, at the time, didn’t fully understand.”

Right.  There are only thousands of years of history regarding inflation.  People who knew that history knew we had an inflation thunderstorm headed right at us.  But Janet Yellen didn’t know.  Nor did Jerome Powell.

Now we have to brace for a hurricane.  

The best way to do that is to get out of the Yellen-Powell-Biden dollar.  Thousands of years of history teach that gold and silver are the best way to brace yourself for a currency crisis.

Want to know more?  Speak with a Republic Monetary Exchange gold and silver specialist.  Just don’t wait for the hurricane to make landfall!


Economic Pessimism Growing

Remember, the authorities can’t print more gold!

Gallup, the polling organization, tells us that consumer confidence has fallen off a cliff.  It lower today than during the worst of the pandemic shutdown.

In fact, consumer confidence has not been this low since the Great Recession with the mortgage meltdown and the housing bubble bust.  

Collapsing consumer confidence is a leading indicator of recessions.  

The problem today according to Gallup’s survey: High inflation and rising interest rates.  

Meanwhile, President Biden had a photo op with Federal Reserve chairman Jerome Powell on Tuesday (5/31).   It was a chance for Biden to make sure Powell and the Fed take as much of the blame as possible for our inflation crisis.  “I’m not going to interfere with their critically important work,” said Biden at the start of the meeting. “They have a laser focus on addressing inflation, just like I am [sic].”

Officials can pose and blame shift all they want, but Texas hedge funder Kyle Bass says there are two things that they can’t change.  “They can’t change the global supply problem for hydrocarbons, which has been based upon a decade of bad policy, and they can’t change the price of food.”

“We’re in a scenario where we have a stagflationary environment,” Bass said. “I think the economy’s going to cool off, I think we’ll have a recession by the end of this year or the beginning of next year.”

We take his opinion seriously.  Bass is the founder and chief investment officer of Hayman Capital Management.  He made half a billion dollars disregarding government economists like Alan Greenspan and Ben Bernanke.

We wrote about Bass a year ago when he was challenging the Fed to talk about transitory inflation.  The massive increase in broad money measures since Covid started, said Bass, rules out transitory.  “So, we’re going to see prices stay high, and move higher over time if the Fed continues to expand its balance sheet,” he said.  

The answer for investors is hard assets, according to Bass.  He is a member of the University of Texas endowment board and was instrumental in having the endowment invest in a billion dollars’ worth of gold.  Why?  Because, said Bass, the Fed cannot print more gold!

That sounds like something we’d say!  And in fact, we have said it over and over.

Speak with a Republic Monetary Exchange gold and silver specialist today, for wealth preservation and profit.


A Simple Story: Gold and the Money Supply

Gold’s price trajectory is more reflective of the growing money supply than it is of the Consumer Price Index.

Although the CPI is widely reported by the popular news media, it is a lagging indicator.  It purports to reflect price increases after they have occurred.

The money supply is generally considered a leading indicator.  

The World Gold Council recently provided the following chart to illustrate the relationship between money supply and gold.

The chart reaches back to 1971 when the US severed the last remaining link of the dollar to gold.  Over that 50-plus year span, the CPI shows a compound annual growth rate of 3.9 percent.  The money supply’s compound annual growth rate for the period (M2) is 7 percent.

Gold shows a compound annual growth rate over the half-century of 8.1 percent.

Accordingly, we present a five-year chart of the growth of the M2 money supply, a broad measure of liquidity consisting of currency and coins, checkable deposits, travelers’ checks, and savings and money market deposits.  

Meanwhile, the Commerce Department’s personal consumption expenditures price index, the inflation index the Fed prefers to follow, dipped in April, rising 6.3 percent, off slightly from its 6.6 pace from the annual rate ending in March.  

As you would expect, the PCE and the CPI track one another fairly closely as this chart illustrates.

The Fed prefers to use the PCE barometer of prices, in part because it allows for consumers to switch spending patterns to buy lower price alternatives to those food items that have risen the most.  As a consequence, it is accused of soft-pedaling the real impact of price hikes.

By any measure, government price statistics can ebb and flow from month to month.  It is more important to be aware that the dollar’s purchasing power is continually eroding over time than it is to assume that a monetary crisis means that each month’s inflation figure needs to be higher than the month before.


wall street

More Losses Are Heading Wall Street’s Way

Grantham likes gold!  Superbubble expert sees more stock trouble ahead! 

If you think you’ve seen some blood spilled on Wall Street so far, wait until those losses double.  

That’s the warning from legendary investor 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.”

We last cited Grantham in January when he wrote an important piece called, “LET THE WILD RUMPUS BEGIN!Approaching the End of) The First U.S. Bubble Extravaganza: Housing, Equities, Bonds, and Commodities.”

As Grantham wrote then, “Today in the U.S. we are in the fourth superbubble of the last hundred years.”  Investors may have months – but not years – to take their profits and head for safety, he added.

It looks like Grantham was right again, with bubbles starting to pop everywhere.  

Now Grantham expects the losses we’ve already seen in the S&P 500 and Nasdaq stock indexes to double: “I would say that at minimum we are likely to do twice that and if we are unlucky, which is quite possible, we will do three legs like that and it may take a couple of years, as it did 2000.”

Whether it turns out to be mild or severe, Grantham said on CNBC last week, “we should be in some sort of recession fairly quickly and profit margins, from a real peak, have a long way that they can decline.”

“I think this kind of 2000 bubble that we had is dangerously likely to morph into the 1970s, where inflation is always a part of the background discussion and where growth rate starts to dwindle away.”

As you might already have concluded, Grantham advises that gold and silver are good safe harbors to counter inflation.

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


From Gas to Hamburgers

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

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

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

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

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

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

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

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

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

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

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

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

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


How Are They Going to Fix it All?

Here is a short list of some of the things going wrong.  It is not exhaustive.  It is just some of the things no one can miss:

  • Gas prices through the roof
  • Double-digit inflation
  • Mortgage rates running up and housing ready to topple
  • Consumer confidence in the tank, an important recession indicator
  • Americans losing trillions in the stock market
  • Unexpectedly rising unemployment claims
  • The US economy shrank in the last quarter
  • And then there is the little old matter of what The Economist calls “The coming food catastrophe.”

We know it sounds troublesome, but not to worry.  Washington knows how to fix it all.  It’ll just send $40 billion to Ukraine!  That should do the trick.

Where will it get the money to do that?  Don’t be a worrier!  It can just borrow the money from China.  China has already loaned Uncle Sam over a trillion dollars.  What’s another $40 billion?  Between friends?

And if China won’t loan it to us, Washington will just have the Federal Reserve print it up.  After all, the Fed has printed up $8 trillion unbacked dollars over the last 14 years.  Today it owns almost 20 percent of US debt.  Purchased with money created out of thin air.  What’s another $40 billion?  

Okay.   Enough of being facetious about all this.  We think a financial calamity is brewing.  And we do not believe the authorities know what to do. 

In our recent memory, the Fed said we needed more inflation.  Then it said inflation was transitory.  Now it says it will stop inflation.  Not only will it stop inflation, but it will also do so deftly, so smoothly that it will be called “a soft landing.”  Although they aren’t too sure about that last part.

We advise getting out of the way of this brewing monetary and financial disaster.  Protect your wealth with gold and silver before the authorities do any more harm.  Speak with a Republic Monetary Exchange gold and silver professional today.


Gas Price Déjà vu!

Another real-life indicator of our inflation calamity!

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

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

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

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

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

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

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

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

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

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

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


Wall Street, Bloody Wall Street!

How bad has it been? Pretty bad!

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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.