After months of ignoring the steadily growing inflation problem, the Federal Reserve is now using monetary blunt force to try to rein in rising prices.
Tangible assets, including the precious metals remain appealing candidates amid multiple risk-factors: inflation, rate-hikes, geopolitical concerns and erosion in purchasing power of paper-assets.
In essence Summers' study on Gibson's Paradox claims to have found empirical evidence of an inverse relationship between the real price of gold and the real interest rate..
Have markets already lost confidence in the Fed’s ability and willingness to tighten? When loss of confidence becomes obvious money will rush to precious metals.
The bear is now free to roam around in investors’ psyches for months to come, and, at times, it will roar!
What is being lost in the political and economic talking points is that we have three underlying sources of inflation.
Rate hikes will push prices higher, not lower.
In May the reduction was about 45 tonnes, bringing the bank's total volume of swaps to 270 tonnes.
Once ag, silver blasts through $50 this 3rd and final time, the duo concur that three-digit silver seems the next most logical target price.
Since Fed officials have been wrong every step of the way in diagnosing the inflation problem, their attempts to cure it will likely fail as well. They were too late to act.