Mills’ analysis often leads to a positive outlook for precious metals like gold and silver during such inflationary periods, seeing them as a hedge against a weakening dollar.
Gold is real money; honest money. The price of gold tells us nothing about gold. The gold price tells us the extent to which the dollar has lost purchasing power.
The fear trade has to do with demonetization, currency destruction, and negative real interest rates, which are usually gold positive. A newer term would be de-dollarization...
Population growth is slowing and will turn negative soon (absent more immigration). We need higher productivity to maintain economic momentum. But again, it’s not enough to have a job for every worker. They have to be the kinds of jobs those workers can do..
This raises another issue with the government CPI data. It is intentionally formulated to understate rising prices. The CPI is nearly double the official numbers.
Each government and central bank is trying to satisfy its own appetite and hoping markets will not notice the lack of cohesion. Markets do notice, and they hedge that uncertainty with gold.
The lone dissenter, Trump appointee Steven Myron, actually wanted a larger half-point cut, underscoring how little appetite there was within the committee for holding the line.
We cut rates even though inflation is alive and well because the economy can’t keep creeping along without another dose of its easy money drug. The economy is addicted.
