Dear Money & Crisis Reader, Over the last two days, I’ve outlined how gold is telling us that the Fed WILL NOT move to stop inflation. By way of a quick recap… - The Fed can stop inflation anytime it wants by tightening monetary policy.
- The multi-trillion-dollar question for the last year has been, “WILL the Fed act to stop inflation or not?”
- Gold has just indicated the answer is probably “NOT” as it erupted out of a nine-month downtrend.
Gold is not the only inflation hedge that is SCREAMING about the Fed’s inaction. In fact, it’s not even the most important! Other Signs of HOT Inflation Indeed, the Fed’s own research has stated the single best predictor of future inflation is FOOD inflation. I realize this sounds odd. After all, publicly the Fed states that its preferred measures of inflation are the Consumer Price Index (CPI) and Personal Consumption Expenditures (PCE). And yet, the Fed’s OWN RESEARCH has shown these metrics do a horrible job of predicting future inflation. Not only that, but the Fed has KNOWN this since 2001! In a little-known paper, published way back in 2001, Fed researchers wrote the following: We see that past inflation in food prices has been a better forecaster of future inflation than has the popular core measure… Comparing the past year’s inflation in food prices to the prices of other components that comprise the PCEPI (as in Table 1), we find that the food component still ranks the best among them all… – Source: StLouisFed.org I want you to focus on these two admissions: |
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