The Easiest Way to Profit During a Period of Inflation Dear Money & Crisis Reader, Over the last week, I’ve been outlining how central banks will finally unleash inflation. By way of review: - Their recent monetary policies have been MUCH more aggressive than they were in response to the 2008 crisis ($15 trillion in six months vs. $12 trillion in eight years).
- This time around, a large portion of this money is actually making its way into the real economy via stimulus payments and direct lending from central banks.
As a result, inflation is beginning to appear throughout the financial system. And now the Fed is stating explicitly that it intends to let inflation run hot! During periods of higher inflation, precious metals tend to do very well. However, precious metals miners do even better! Below is a chart showing the performance of gold miners compared to the performance of gold. When gold miners outperform gold, this ratio rises. When gold miners underperform gold this ratio falls. As you can see, the GDX: Gold ratio has been in a strong uptrend since the March bottom. This tells us that we are entering an inflationary period as gold miners are outperforming gold bullion. If you’re unfamiliar with gold miners, rather than trying to pick out a single play, consider investing in a basket of them via the Gold Miners ETF (GDX). |
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