Inflation/Deflation

Since 1996, the Federal Reserve has oriented its monetary policy around maintaining 2% inflation annually and, for the most part, U.S. inflation over the past couple of decades has typically hovered within a percentage point or two of that target but, right now, most price categories are exceeding that, some quite dramatically. Here’s how various categories of consumer spending have fared over the past 12 months:

The PCE price index without food and energy - the lowest lowball inflation measure that the U.S. government releases -  rose by 3.64% in September, compared to a year ago, the hottest inflation reading since May 1991.

Canada and the U.S. are showing significantly higher headline inflation than their peers. Initially it was sold as transitory, but that narrative is falling apart these days. Unbiased organizations are even forecasting the risk is now to the upside for Canada and the U.S..

The lowball core PCE measure of inflation rose by 3.62% compared to a year ago, the hottest inflation reading since May 1991 while the PCE price index with food and energy included jumped by 0.4% for the month (4.8% annualized), and by 4.3% from a year ago. This is the hottest PCE inflation reading since January 1991.

The Organization for Economic Co-operation and Development (OECD) released its 2021 summer outlook which suggests that elevated levels of inflation may stick around longer than central banks have let on.

Investors who want to maintain the purchasing power of their portfolio AND their standard of living through inflationary periods will find this article to be not only fascinating, but possibly provocative.

Is the spurt of inflation the last few months likely to be sustained, or to fade?

Explosive fires always end in everything burning down or imploding eventually and this is just what is going to happen in the next few years. A massive forest fire is not just totally inevitable but is also an absolute necessity.

“I'm predicting for something close to a hyperinflationary circumstance, and effectively a collapsed economy, in early 2022.”

With deficits growing wider each year, we believe there is a very high likelihood that the price of gold will rise in the next few years.