Three More Important Things for People Interested in Gold
But first a reminder. The price of gold had a sharp correction in the middle of March with the COVID-19 lockdown,
It proved to be a great buying opportunity, but it lasted only two weeks. We think any pullbacks in the gold and silver prices should be seen as a buying opportunity.
Now, on to our stories:
CONSUMER PRICES MOVING UP!
What did you think would happen when the printed all that money?
In early June, we covered a Wall Street Journal story that reported “Fastest-Rising Food Prices in Decades.”
It described food prices increasing 5.8 percent between March 1 and May 30, compared with the same time a year ago.
Now we have learned that for July, the headline Consumer Price Index rose 0.6 percent over the June number. That was twice as much as was widely expected.
Food and medical categories led the CPI increase.
BILLIONAIRE BOND INVESTOR SEES GOLD MUCH HEADED MUCH HIGHER!
Remains “unequivocally bullish!”
Jeffrey Gundlach is the CEO of $135 billion DoubleLine Capital. We’ve included him in writing about “the smart money” that has been buying gold.
Gundlach turned bullish on gold in the summer of 2018.
Gundlach was not surprised by the gold correction on Tuesday (8/11), but the exploding US deficit remains a major component of Gundlach’s analysis.
“If we are going to continue that type of a pace, we’d be looking at over 50 percent of GDP in terms of the budget deficit, which is getting almost surreal in terms of what’s happening.”
“Gold will ultimately go much higher because I think the dollar’s going to go much lower,” he said.
Why Fed Bugs Really, Really Hate Gold!
Well, if there are “gold bugs,” there must be “Fed bugs!”
“Fed bugs are people with a faith-based belief in the power of central banks (and central bankers) to engineer economic growth using “monetary policy,” despite decades of history and current evidence to the contrary. They believe tinkering with inputs and rates and velocity and flows somehow makes us richer in terms of productivity, goods, and services. They believe in financial alchemy, as economist Nomi Prins puts it, rather than precious metals. They believe paper has value so long as government issues it and legislates its use. Most of all, they believe in technocratic control over money in the economy.”
So writes the always brilliant Jeff Deist, president of the Mises Institute.
“They hate gold because it never goes away and never goes to zero. It holds monetary value intrinsically, without the imprimatur of a sovereign or government. Gold does not need the state or its bankers to operate as money, because individuals choose it as money on the market century after century.”
More from Deist on the Fed bugs HERE.