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Articles in the Inflation Category

Economy, Gold, Headline, Inflation, Politics »

Race To The Bottom

Essentially countries want lower currencies priced against other currencies in order to stimulate exports. Of course if your exports are cheaper for other countries, then stuff is also more expensive for your own people, but that’s irrelevant, right? Well, what happens when EVERYONE is devaluing against eachother trying to all stimulate exports? Well, you have all currencies losing value.

Gold, Inflation, Investing, Quick Hits »

Amazing action in the markets right now. The Dow ended the day today down 260ish and meanwhile gold spiked above $1650/oz. Put them together and you have a crashing dow/gold ratio. I’ve been saying for years that this is going to head lower. You have to watch the price of gold in the new era of printing money. It shows whether or not the bull run in stocks is legitimate or just a easy money result. I’d say that it’s showing to be the latter. The Dow/Gold ratio is approaching …

Economy, Headline, Inflation »

Government Considering Changing How CPI Is Calculated

What do you do when inflation gets in the way of policies?  Well you change how we define inflation of course!  As long as the CPI number is in good standing, nobody can argue that inflation is here!  Forget $10/gallon gasoline, we have a flat CPI! (sarcasm)
If it weren’t so serious, it’d be funny, but this is exactly what is being considered by our great leaders in DC.
An article from Zero Hedge discusses the considerations over changing the CPI formula.  Here is an excerpt:
“Lawmakers are considering changing how the Consumer …

Gold, Inflation, Quick Hits »

If a third round of quantitative easing is on the table (and many think it is) there is one thing you can bank on… continued interest rates at or near zero.  Zero interest rate policy (ZIRP) will continue for years in my opinion.  Real rates will be negative based on inflation, and that means gold continues to go higher.

Economy, Inflation, Investing »

Stagflation Victim: Gap, Inc. (GPS)

Prime stagflation victim is Gap, Inc. (GPS) which operates retail clothing stores like Gap and Old Navy.  The lower end clothing lines have been victim of higher input costs such as cotton (and of course fuel for transport) which has squeezed margins.  Meanwhile, consumers are tight because of no wage growth and higher food & energy costs.  Hello stagflation.
This is no surprise and is a story that we should continue to see play out.  Who are the companies doing well?  The multinationals that have pricing power and a global reach.  …

Gold, Headline, Inflation, Trading »

I Expect Silver To Continue Move Lower In Near Term

Silver plunged something like 30% last week, then bounced for a few days – a text book dead cat bounce – and today dropped big again.  I expect this to continue at least to the $30 level and I still think silver could correct as low as $20.  I put a short term short trade on silver by using the ZSL and will take gains in that if it it plays out as I expect, then buy back into silver in the area around $20 (if it indeed goes as …

Economy, Headline, Inflation, Investing, Politics »

What To Watch In The Days Ahead

We’re rapidly approaching some important days and most likely important events.  Most of these events surround the Federal Reserve and the conclusion of the quantitative easing process we’re currently engaged in, usually referred to as QE2.
Interestingly, the rhetoric is what you need to watch, because if you pay attention closely to what people are saying on CNBC and other outlets, the tone has already shifted slightly.  This week we have seen weak housing numbers and weak job numbers (ADP report).  Coupled with this, we’ve seen a massive drop in commodities …