Here Comes the Stagflation Crisis
The post looks at the current economic turmoil marked by inflation spikes and record lows in consumer sentiment—and how gold investment might be your best move.
The post looks at the current economic turmoil marked by inflation spikes and record lows in consumer sentiment—and how gold investment might be your best move.
The US debt just surpassed $39 trillion. Coupled with sluggish growth and increasing inflation are both signals that stagflation is already here.
Discover how stagflation, combining inflation and economic stagnation, is fueling gold and silver prices. Learn why now could be a key time for precious metal investments.
Stagflation is a double-whammy. It’s a one-two punch. It is best avoided. The evidence that serious stagflation looms over us grows by the day. That means more inflation and a serious recession. If you have not moved a significant portion of your assets to gold and silver, you have not sufficiently prepared yourself for a new era of stagflation. More evidence: The Fed’s best model for predicting growth is flashing red for recession. The Federal Reserve Bank of Atlanta’s model, called GDPNow, is predicting a 2.8 percent downturn in the first quarter. That is a good step toward recession. Consumer spending is a major component of GDP growth, in fact almost two-thirds. Consumer spending has gone flat. February job growth failed to meet expectations. Part-time jobs were up, but the number of full-time jobs fell by twice that amount. The administration is aware that the economy is slowing down. Treasury secretary Scott Bessant said on CNBC that the
The Worst of Both Worlds! Is the Stagflation Train pulling into the station? Bringing both inflation and a depressingly stagnant slow growth or shrinking economy with it? If you listen carefully, you can hear its whistle blowing. It’s coming around the bend! The Stagflation Train brings carloads of economic misery, but at the same time as we know from experience, we can protect ourselves from stagflation and profit with gold! Bigly! Stagflation has two components, inflation and stagnation. Rising prices in slow or no growth economy means the cost of living goes up, but the opportunities to make money go down. And that is a bad combination! The inflation case is quite simple, and we have been made it often recently. We are already experiencing re-inflation. The highest inflation in 40 years that we experienced during Biden’s term never really went away. The Consumer Price Index for January has climbed for the fourth straight month. The month over month
The Inflation outlook... Grim! Our adjoining post this week STAGFLATION HERE AND NOW? focuses mostly on evidence of the slowing US economy. That is the stagnation part of stagflation. Now we look a little more closely at the inflation component of stagflation. Let’s start here. The Consumer Price Index has been higher than the Federal Reserve’s entirely arbitrary two percent target for 16 consecutive quarters, for 47 months in a row! From the first quarter of 2021 until now, the Fed has been unable to reach its own inflation target. Meanwhile... lingering, prolonged inflation has now turned into reinflation. As we have noted, the Consumer Price Index for January has climbed for the fourth straight month. The month over month numbers, increase for the same period one year earlier have risen for the seventh straight month. Reporting that inflation is moving up again, Bloomberg News writes that, “No matter what metric you’re looking at, US inflation is moving in
Stag + Flation + Gold Time to brush up on what it’s like to live in a stagflationary economy once again. Here are the three most important points: STAG - That’s the part that describes the economy as stagnant. It means either slow or no growth, and even economic contraction. FLATION – That’s the part that means inflation, that the money is losing value because the central bank is making more of it out of thin air. GOLD – That’s not in the word stagflation, but as we experience in the textbook stagflation of the 1970s, gold goes up. Way up. So what is going on now? Let’s start with STAG. According to a report on CNBC, 59 percent of Americans believe that the U.S. is currently in a recession. They arrive at that conclusion not by looking at the Washington statistics machine, but by looking at conditions in their own lives. Economic growth is hard to spot. Home Depot