Curious Notes for Gold Investors from our Notebook

12 Aug

Curious Notes for Gold Investors from our Notebook

Inflation, Anyone?

The official inflation numbers for July continue to show persistently climbing consumer prices.  The Labor Department’s Consumer Price Index rose 0.5 percent in July.  

For the twelve-month period, the CPI was up 5.4 percent.  The three-month annualized rate, after 0.6 percent increase in May, 0.9 percent increase in June, and July’s 0.5 percent increase, is 8.1 percent.  

The so-called core price index which excludes food and energy prices, was up 0.3 percent in July.  

Big Spending, Anyone?

The US Senate looks increasingly like the Roman Senate during that empire’s last days. reports that the Democrat-led Senate approved more than $4 trillion of spending in less than 24 hours between the mornings of Tuesday (8/10) and Wednesday (8/11).

“The Senate passed a $1.2 trillion infrastructure bill, which includes $517 billion in new spending and a reauthorization of funding from the highway bill, at 11:17am on Tuesday. 

“The Senate moved to debate on the Democrats’ filibuster-proof $3.5 trillion budget reconciliation proposal. The framework for the plan authorizing that level of federal spending passed in a 50-49 vote early Wednesday morning at 3:50am.”

The Roman Emperor Caligula is said to have made his favorite horse a senator.  Our senators lack even horse sense.

Gut Check, Anyone?

The US government is borrowing at the rate of $2 million a minute.

A Sign of Inflationary Times, Anyone?

We frankly admit it is something we had never thought of, and it is not among our biggest concerns, but now we wonder if inflation will kill the dollar stores?

A Deutsche Bank equities analyst has downgraded the stock of dollar store chain Dollar Tree.  After all, what happens to a dollar store’s marketing position when inflationary pressure cause goods to break the buck?  

“Accelerating cost pressures… particularly in light of the Dollar Tree banner’s fixed $1 price point… limits its ability to absorb higher costs through price increases, putting margins at risk.”

We suppose the dollar store will go the way of the ten cent stores of yesteryear.  And the nickel candy bar.