Gold Is Laughing at Powell
The comments below are an edited and abridged synopsis of an article by Matthew Piepenburg
Former Fed Chair Alan Greenspan is an easy target to name as ‘patient zero’ of the reckless interest rate suppression and unbridled monetary expansion policies of the Fed, which have always led to equally reckless boom and bust cycles in markets and economies.
But Greenspan is not alone in making a mockery of his post. Nearly every person who has led a private bank masquerading as a Federal Reserve has made the bank, and themselves, a public embarrassment.
As the legendary private investor Jim Rogers recently observed, almost all central bankers effectively lie and obfuscate facts as part of their job description (and job preservation) at the Fed.
Up for discussion: A central banker’s job description; the latest nonsense from Fed Chair Powell; a brief translation of fed-speak; did Powell take a math course or read a history book; don’t forget the endless Larry Summers; turning to gold; and getting technical.
For those who track facts rather than fiction, there are two factors favourable to gold right now: namely, more growth in the broad money supply and more negative real interest rates.
And as for negative real (i.e., inflation-adjusted) rates, Piepenburg has written at length about how well gold shines when inflation rates outpace yields on US Treasury bonds.
As Fed Chair Powell has told us, repressed bond yields and repressed rates are inevitable in the coming years for no other reason than the Fed can’t afford those rates to go much higher.
And as for inflation outpacing those repressed rates, that too is no longer theoretical or debatable, as inflation is measured by the expansion of the money supply rather than the fictional math of the CPI scale that, despite its openly bogus reporting, cannot hide the inflationary signals coming from commodity prices, rising M1 and M2 data, and increased governmental control of the banking system.
In short, the foreseeable future is clearly one that favours inflation outpacing yields and thus smiling upon gold.