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We call it the biggest monetary megatrend of our time.  It is a development with long-term implications for the US dollar (not good) and for the price of gold (very good).

The headline from the World Gold Council reads, “Central banks add more gold in November as China joins the fray.”

According to the report, “Central banks bought a further 50 tons on a net basis during the month, a 47 percent increase from October’s (revised) 34 tons.  Of this net total, three central banks accounted for gross buying of 55 tons, while two largely contributed to gross sales of 5 tons, showing the strength of demand.”

“The biggest announcement of the month came from the People’s Bank of China (PBoC). It reported an increase of 32 tons, the largest reported purchase in November and the first announced increase in its gold reserves since September 2019. This announcement is significant given China’s historic position as a large gold buyer, having accumulated 1,448t between 2002 and 2019.

Central banks added a further 50t to global official reserves in November*

The WGC calls central bank gold buying one of the highlights of the year gone by with acquisitions of 673 tones between the first and third quarter of 2022.

Of course, we think calling this a “highlight” understates its importance for three reasons:

1. Central banks fortifying their reserves with gold are doing so after the evaluation of the US dollar.  They find gold to be a more reliable alternative.
2. It implies the long-term return of gold to its central place in the world’s monetary system.  We remind our readers along the way that countries that are net acquirers of gold become more dominant in the affairs of mankind.  (That means China.)  Those that are net dishoarders of gold find their global positions marginalized.
3. Gold held by central banks is gold in strong hands, as opposed to ETF holdings.  Central banks are not holding gold as short-term speculations.  

We encourage our friends and clients to take note of this gold megatrend and participate in the powerful breakout move in gold that has been underway for two months.  Move to the safety of gold.

In the meantime, the WGC promises to make the 2022 full-year numbers available at the end of January.  

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Neel Kashkari is the president of the Minneapolis Federal Reserve Bank.  

In a new essay, Kashkari wonders why he missed the inflation that is hurting our economy so badly.  He says the Fed and others outside made the same errors.  “First, being surprised when inflation surged as much as it did and, second, assuming that inflation would fall quickly.”

They missed it because they made the same errors.  They missed it because their “tools” didn’t work.  They missed it because their “models” were wrong.

Now that’s a real nothing burger for you.  They missed it because they missed it.

The financial news website ZeroHedge is simply merciless in its criticism of Kashkari, calling him a real “failer-upper.”  We have to agree.  He was a Goldman Sachs man who Hank Paulsen brought along with him to Treasury.  The story about how Kashkari arrived at the $800 billion Bush bailout of the big banks is a classic.  He figured out how to save the economy on his Blackberry.  It turned out to be one of the biggest wealth transfers of all time!

ZeroHedge writes that “market participants are used to broadly ignoring the Minneapolis Fed president’s insights into the monetary policy (not only does he not understand it, but he has been wrong about pretty much everything during his relatively brief Fed career) if only to listen to him for perspective on what will not happen.”

A year ago Kashkari thought the Fed funds rate would be 1 percent in 2023.  It is actually 4.25—4.5 percent.  

We don’t especially fault Kashkari or anyone else for being wrong in their forecasts.  “Predictions are hard, especially about the future,” said the great physicist Niels Bohr.  But we do fault Kashkari and his fellow Deep State Money Manipulators for screwing around with interest rates, imposing their wild guesses on the economy.  In his book about the errors of socialism, Hayek called this the Fatal Conceit.  People like Kashkari and the rest of the Fed geniuses don’t know what they don’t know.  “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design,” said Hayek.

Interest rates are the price of money, and like other prices, they should be set not by bureaucrats and PhDs, but by real conditions of supply and demand.  Otherwise, they create huge distortions in the economy.  Milk prices set artificially high by the government lead to warehouses filled with surplus cheese.  Prices set too low by the government lead to shortages.  That is why Soviet grocery stores were always empty.

And that is why the Fed’s monkeying around with interest rates creates bubbles.  And ruins currencies.

It’s about time we put the Fed out of our misery.  Don’t be victimized by their mismanagement of our economy and the US dollar.  Protect yourself, your family, and your wealth from the likes of Neel Kashkari.  Speak with a Republic Monetary Exchange gold and silver specialist today.  

Remember, they can’t just print more gold!

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Near Double-Digit Inflation in Phoenix Metro!

If inflation is surprising on the downside, why does gold just keep marching higher?

Could it be there is more to this story than meets the eye?

As usual, the answer is yes.  

The Consumer price index through December shows prices up 6.5 percent over the past 12 months.

Lower gasoline prices helped keep the overall CPI number from registering higher.  The gas component of the CPI for the month of December was down 9.4 percent from the November level.  Nevertheless, overall energy costs climbed 7.3 percent over the 12 months. 

Food prices registered an increase of 10.4 percent over the year.  The shelter index was up 7.5 percent.

Most alarming may be the increase in services, which accounts for two-thirds of consumer spending.  The services price index rose 7.5 percent, the most in 40 years.

Lower gas prices are a function of lower crude oil prices globally.  Reduced crude demand may be signaling a gathering recession, although China’s reopening of its economy can be expected to push up gas prices higher.

Consumer prices continue to rise at near double-digit rates in the Phoenix metropolitan area.  The Phoenix CPI is up 9.5 over the past 12 months.

In the meantime, real average weekly earning for American workers have now trended lower for 21 consecutive months.

Many analysts and Wall Streeters are calling for the Fed to slow or stop hiking interest rates in response to the lower CPI report.  The next Fed meeting is at the end of January.

Just as it has been climbing fast since the beginning of November, the gold market greeted the CPI news on Thursday (1/12) by racing ahead $20, sharing the expectation that the Fed will pivot to a policy of reduced rate increases and ultimately higher inflation.

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War leads to larger fiscal deficits, more debt monetization, and higher inflation on a persistent basis!

Nouriel Roubini is an economics professor emeritus at New York University’s Stern School of Business.  But he’s better known to some as “Dr. Doom” stemming from his correct call of the 2008 meltdown.

Roubini warns that wars burden national budgets, exacerbating already high debt levels and inflation.

Here is his assessment of the state of world conflicts today:  

The world is going through a form of “geopolitical depression” topped by the escalating rivalry between the West and aligned (if not allied) revisionist powers such as China, Russia, Iran, North Korea, and Pakistan. Cold and hot wars are on the rise. Russia’s brutal invasion of Ukraine could still expand and involve NATO. Israel – and thus the United States – is on a collision course with Iran, which is on the threshold of becoming a nuclear-armed state. The broader Middle East is a powder keg. And the US and China are facing off over the questions of who will dominate Asia and whether Taiwan will be forcibly reunited with the mainland.

Accordingly, the US, Europe, and NATO are re-arming, as is pretty much everyone in the Middle East and Asia, including Japan, which has embarked on its biggest military build-up in many decades. Higher levels of spending on conventional and unconventional weapons (including nuclear, cyber, bio, and chemical) are all but assured, and these expenditures will weigh on the public purse.

These factors make inflation “secular,” rather than “transitory,”  warns Roubini.  So you should plan on elevated inflation for a long time.  

We will only add to Roubini’s description the observation that China’s surge of gold buying in the last two months may be preparation for a forthcoming conflict.  

“A conflict with China, would be fundamentally unlike the regional conflicts and counterinsurgencies that the United States has experienced since World War II, with casualties exceeding anything in recent memory,” warns a new report from the Center for Strategic and International Studies.  “The high losses would damage the United States’ global position for many years.”

In any case, “a great stagflationary debt crisis is upon us,” says Roubini.  And that means high unemployment, high inflation, and a major stock market crash.  

Furthermore, the crisis will be “deep and protracted,” he says.

Is your gold and silver portfolio up to date?  This would be a good time to make sure you are protected from war, crashes, and high inflation. 

The Capital City’s Corruption is Complete!

The colorful wrapping paper and bright bows had been thrown away, and the trees have come down.  So, let’s see what the Washington people gave themselves with your money this Christmas.

As we survey their stocking stuffers, remember that the end days of any republic are a good time to own gold.  That’s because the governing classes, the power centers, and the cronies steal everything that is not nailed down. And they always debauch the currency – the people’s money, your money – to pay for it.

Here’s one:  Besides the 87,000 new armed IRS agents, Congress is now appropriating money for the IRS Commissioner to have a chauffeur.  

Great!

There is a $45 billion new gift under the tree for Ukraine. Senate Minority Leader Mitch McConnell says these appropriations are good for America’s economy because they create American jobs: “These investments will help expand our defense manufacturing capacity and contribute to an industry that supports high-paying American jobs.”

This is typical of the economic confusion that characterizes Washington.  Without that appropriation, the $45 billion would remain in the pockets of Americans who would spend it on things that actually make their lives better.  McConnell’s work only takes money from the people at large to give to well-connected cronies who can be counted on to make generous campaign contributions to people like… well, people like Mitch McConnell.

So here are some of the other goodies they gave themselves in the year-end omnibus bill, as reported by the always-alert Jim Bovard in a New York Post article.

• “Monuments to Me” in the bill commemorate politicians’ generosity with other people’s money — including the “Speaker Nancy Pelosi Federal Building” in San Francisco and the “Nancy Pelosi Fellowship Program” for the State Department. Sen. Patrick Leahy (D-Vt.) finagled his name onto the Patrick Leahy Lake Champlain Basin Program. Sen. Richard Shelby (R-Ala.) also got his name on an FBI training facility even though “almost everything in Alabama is already named after him,” according to Scott Parkinson of the Club for Growth. 

• $3.6 million for the Michelle Obama Trail in DeKalb, Ga. Perhaps the four-mile trail will be a consolation prize for Michelle after her signature “Let’s Move” campaign dismally failed to end childhood obesity. 

• $200 billion is budgeted for the Gender Equity and Equality Action Fund, part of President Biden’s glorious worldwide crusade for the rights of females. Will that program include sending condolence cards to the women of Afghanistan? Or maybe all the money will be fizzled for zany projects like “Women’s Economic Empowerment through Gender Sensitive Value Chain ­Interventions” in Albania.

• The bill provides massive subsidies to encourage the continuing tidal wave of illegal immigration while banning spending any funds “to construct border fencing in certain areas,” according to the Heritage Foundation. While scoffing at safeguarding the US border, Congress is sending $410 million for “enhanced border security” to Jordan, Lebanon, Egypt, Tunisia and Oman, according to Rep. Dan Bishop (R-NC). 

• Congress is dolloping out $1.5 million for the COVID-19 American History Project. That program is more likely to have rows of Anthony Fauci Bobbleheads than to include the sordid details of the Centers for Disease Control and Prevention and the National Institutes of Health browbeating Twitter to censor critics who exposed the deceits of federal policymakers.

Brovard also points out that “to fill the fearmongering void caused by Fauci’s retirement, the omnibus bill creates a new White House pandemic czar.”

Just what we need!

So, it is always a Merry Christmas for Washington’s cronies.  As for us, we can see the dollar going up in smoke, and we will be buying more gold and silver in the New Year!

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

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

– Wolf Richter

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

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

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

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

– Tucker Carlson, Fox News

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

— David Ricardo
British political economist (1772-1823)

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

— Jim Clark

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

— James Grant

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

— Ludwig von Misis

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

— F. A. Hayek

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

— Ayn Rand

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

—  Alan Greenspan

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

— Ron Paul

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Don’t get too excited over one good inflation report.  So advised a Bloomberg news headline after the November Consumer Price Index came in a little lower than the previous month!

Everywhere people crowed.  Biden and his economic team rushed to the cameras to take credit.  “What is clear is my economic plan is working and we’re just getting started,” Biden said.

On average, consumer prices paid by the American people have risen 13.8 percent since Biden took office.  Higher prices are costing the average family $5,800 per year according to the Heritage Foundation.  To that higher interest rates must be added.  The average cost of interest rates per family is $1,300, for a total yearly hit of $7,100 under Biden.

The CPI for the 12 months through November was up 7.1 percent.   7.1 percent is down from 7.7 the month before, and down from 9.1 percent in June.

But before anyone gets too excited about a better month, let us take a deep breath and remember that inflation is not like a light switch that can be turned on or off.  The rate of inflation cannot be fine-tuned.  The economy is not mechanical, and prices cannot be engineered by a central authority.

Perhaps some of our readers are old enough to remember the way inflation rose and fell and rose again during the stagflation decade of the 1970s.  This chart captures the annual CPI rates as they were reported during that period.  You can see inflation came in waves.

Price inflation climbed to 10 percent and beyond in 1974, dipping to 5 percent in 1976, before surging to almost 15 percent in 1980.

We wish it were not so, but a couple of good months don’t mean the inflation monster has been slain.

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

Nothing in the lifetimes of many of our friends and clients and their families has matched this period for its financial instability.  The year gone by has been one of serious inflation – rising to double-digit rates in many parts of the country including our own.  The Fed’s attempts to bring inflation under control have been both too little and too late and the dollar and people’s savings and retirement plans have been badly diminished.  

We may be witnessing the end of another fiat monetary system.  

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

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

If you had your choice of putting some government paper money in a box under the Christmas tree, or gold, to pass along to your children and grandchildren, you would be wise to choose gold.  

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

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

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

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

Merry Christmas from all of us at Republic Monetary Exchange!

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What’s Going On in Washington?

Spending.

That’s what’s going on in Washington.  Seriously, it is almost like their disconnection from financial reality has as last become complete.  

And it has.  Here are the facts for November:

Federal spending for the month was $501 billion.

Federal revenue was $252 billion.

You probably already figured out for yourself just how gigantic the November deficit was.  It you thought it was about a quarter of a trillion dollars, you are right there in the ballpark:  It was a record $249 billion.

That implies an annual deficit of $3 trillion.  

This is so far from manageable as to make mature, responsible people break down and cry.  Former US budget director David Stockman (himself a mature and responsible person) asks, “In exactly what universe, therefore, is that not inflationary?

By the way, why did federal spending come in so high, up 53 percent from the same month last year?  The answer is debt service.  As we have all noticed, the Fed has been prodding interest rates higher, and Washington suffers those higher rates just like the rest of us. 

Check out the sharp spike on the far right-hand side of an already skyrocketing chart of Federal interest rate expenses: 

Want more spending news?  Probably not, but here it is anyway.

By a vote of 83 to 11, Congress has now passed a record-busting  $858 billion National Defense Authorization Act.  It is headed to the White House for President Biden’s signature.  

Will Biden sign it?  Of course, he will, even though it is $45 billion more than he asked for.  

By the way, the bill includes $10 billion for Taiwan, which will be used to purchase weapons from US arms manufacturers.  

There’s more.  Ron Paul writes that more money is being shoveled into the Ukraine black hole.  “Senate Majority Leader Chuck Schumer has signaled that the next huge check – nearly $38 billion – will be conveniently hidden in a year-end, must-pass omnibus bill. It’s a way to keep the gravy train flowing while sparing Members the inconvenience of having to face voters.”

Meanwhile, even mainstream news outlets are noticing the popping of the central bankers’ Superbubbles.  He’s a clip from The Hill:  “While recent crashes in British bond prices, real estate in China, and stocks in the U.S. were driven by different catalysts, they all reflect a common cause largely ignored: the popping of a worldwide wealth bubble.”

And here’s a disturbing number from CNBC:  “As of November, 63% of Americans were living paycheck to paycheck, according to a monthly LendingClub report — up from 60% the previous month.”

Doesn’t it just make you want more gold and silver?  It does us, too!

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So the Federal Reserve is slowing down on its interest rate increases.  After raising rates by 75 basis points (3/4 of a percent) at each of its last four meetings, the Fed opted to pull back to 50 basis points this month.

But it hasn’t yet achieved its objective of wringing inflation out of the US economy.  In fact, consumer price inflation remains at a 40-year high.

What gives?  Why pull back before the mission is accomplished?  It is because the Fed is in a jam, between a rock and a hard place.  For a more complete answer, we give the floor to gold and economics expert Congressman Ron Paul who explains the Fed’s bind:

If it [the Fed] raises rates to the levels needed to really combat price inflation, the increase in interest payments will impose hardships on individuals and businesses, as well as raise federal interest payments to unsustainable levels. This will cause a major economic crisis including a government default on its debt causing a rejection of the dollar’s world reserve currency status. Also, if the Fed continues to facilitate federal deficits by monetizing the debt, the result will be an economic crisis caused by a collapse in the dollar’s value and rejection of the dollar’s world reserve status.

The crisis will lead to social unrest and violence, as well as increased popularity of authoritarian movements on both the left and the right. This will lead to government crackdowns on civil liberties and increased government control of our economy. The only bright spot is this crisis will also fuel interest in the ideas of liberty and could even help bring about a return to limited, constitutional government, free markets, individual liberty, and a foreign policy of peaceful trade with all. Those of us who know the truth have two responsibilities. The first is to make the necessary plans to ensure our families can survive the forthcoming turmoil. The second is to do all we can to introduce as many people as possible to the ideas of liberty.

When Dr. Paul says “to make the necessary plans to ensure our families can survive the forthcoming turmoil,” that’s where we come in.  That’s what we do.

Make an appointment with your Republic Monetary Exchange gold and silver professional to get updates and review your own plans for the financial turmoil ahead.

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China is getting out of the way.  You better get started, too!

The smart money has begun de-dollarizing.  They see that the future holds a more rapid devaluation of the US dollar.

It is the only way Washington can keep its mega-debt serviced.

The media tells you the Federal Reserve has raised interest rates dramatically, a replay of the Volcker method, designed to once again wring inflation out of the dollar economy.  But the Volcker method involved raising interest rates well above the inflation rate.

The current consumer price inflation rate is said to be 7.7 percent annually.  But the Fed’s targeted policy rate, the Fed funds rate, has only been raised to 3.75 – 4.00 percent, still way below the inflation rate.   The forthcoming December Fed meeting is widely believed to result in throttling back to a lesser rate increase than the prior months. 

Leaving the Volcker job undone.

If you wonder about the Fed’s apparent lack of resolve on the inflation front, we point you to the open secret that rates somewhere below the inflation rate are needed so that the monetary authorities can devalue the otherwise unpayable US debt burden.

We call this an open secret, because other central banks, know the craft of money printing themselves, are moving out of dollars and into gold.  

 In just the last week we learned that China has added another 32 tons of gold to its reserve holdings. It is the first officially acknowledged addition to China’s gold position in more than three years, putting its official reserves at 1980 tons.  

The World Gold Council reports that central banks added 400 tons of gold to their holding in the July-August-September quarter this year.  

Central banks have been net purchasers of gold for 13 consecutive years.  

Meanwhile, the WGC, looking ahead to 2023, is in the camp of those who foresee a recession.  WGC noted that gold has seen positive returns during five of the last seven recessions.

“Historically, tightening cycles [such as we are in now] have ended in a recession,” says Juan Carlos Artigas, WGC’s head of global research.  “The more severe the recession, the better gold does.”

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It’s hard to comprehend just how much money has gone into Washington’s “stimulus” measures.  But this might help.

It compares Biden’s spending measure to other US benchmark spending bills.

Biden’s American Rescue Plan is 2.4 times larger than all the New Deal spending between 1933 and 1940.  The so-called Inflation Reduction Act is 8.5 times the size of the Marshall Plan that rebuilt much of Europe after World War II.  The Bipartisan Infrastructure Law is about the same size as the Inflation Reduction Act.

By the way, all of these costs have been converted to 2020 dollars to make comparisons possible.

You might think that all this spending would generate some red ink.  Well, you would be correct.  

Take a look:

As you can see, the debt problem does not consist solely of federal debt.  State and local, consumer debt, and corporate debt all add up to $64 trillion.  But almost half of that is federal debt.

According to the International Institute of Finance, total global debt has been running about $300 trillion.  That’s about three times the total global production.

We’re not saying that the interest on $300 trillion is nothing but a cakewalk, but it’s a lot more manageable when interest rates are 1 or 2 percent than it is when rates are closer to 5 percent, which is where they are headed.

The problem gets even worse when interest rates are higher and growth falters as it does in a recession.  That means the level of taxable activity falls.  At the same time, government social spending usually rises and deficits get larger.

As always, the Federal Reserve has a printing press (digital, of course) on standby, ready to print however many new US dollars it takes to keep up Washington’s appearance of solvency.

But no matter how hard they try, they haven’t been able to figure out how to print gold!

Have you spoken with an RME gold and silver specialist lately?  With the entire world struggling under an unsustainable and unpayable load of debt, it would be wise to do so!

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“God have mercy on us all!”

When someone tries to warn you about what’s going to happen and says “God have mercy on us all,” you better believe they’re talking about something very serious indeed.

But those are the exact words of our friend Robert Kiyosaki, warning about what is going to happen to the economy.  And to you.’

Robert Kiyosaki is the author of the number one biggest-selling personal finance book of all time, Rich Dad, Poor Dad.

Rich Dad, Poor Dad has been translated into 51 languages.  It has sold more than 40 million copies.  Robert has written dozens of other books, including two books he co-authored with Donald Trump.

Now, in remarks blasted all around the globe, Kiyosaki says we are in the biggest financial bubble in the history of the world!

Others have called it a Superbubble and the Everything Bubble.  (Learn more here and here.)

Warning of the damage from the popping Superbubble which are markets inflated to unsustainable heights by the Federal Reserve’s money printers, Kiyosaki says, “I would get out of all paper assets.”

The FTX digital exchange bankruptcy and Bitcoin falling from the heights are signs of the air coming out of the bubbles. At the same time, the Fed is now test-driving its own digital currency.

Robert Kiyosaki’s warning sounds serious, and it is serious.  It’s “the biggest bubble in world history,” he says.

If you would like help protecting yourself and your retirement from the bursting of the biggest financial bubble of all time, contact us at once.

Let us show you how to protect yourself with gold and silver.

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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.

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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.”

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.

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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.

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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.

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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.

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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.  

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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.

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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.

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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.

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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.”

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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!

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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.

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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.

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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.

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“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!

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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.  

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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.

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.

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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.

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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.

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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!

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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.

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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!

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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 15^th 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.

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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.

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featured image credit: Gage Skidmore

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.

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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!

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.

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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.  

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.  

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.

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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?

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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.

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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!

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“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.  

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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.

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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.

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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 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.

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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.  

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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

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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.

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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!

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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?

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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 rate	Interest 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

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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.

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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.

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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!

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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!

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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.

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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.

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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!

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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.

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“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!

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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.

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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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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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.

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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!

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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.

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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. 

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

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

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

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

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

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

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

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

Big difference.

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

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

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

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

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

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

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

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

John Tamny

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

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

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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

A 1978 Saturday Night Live skit has become this administration’s fiscal policy – #america pic.twitter.com/5ADdXTM8rv

— Dr. Jesse Livermore Ph.D., Law📈 (@JessieLivermore) April 4, 2022

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.

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…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.”

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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.

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

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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.

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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.

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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. 

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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.

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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.

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