Higher Inflation and Gold..!
I published my first analysis about US inflation on May 30, 2021, and write about the change in its behavior and acceleration!
Today, the United States Inflation Rate YoY: 6.04% and the United States Core Inflation Rate YoY: 4.6%..!
While you see FED's chair talking about transitory and some others talking about deflation, numbers say something else! (I usually prefer listening to numbers than listening to people)
I think this could lead to a double-digit inflation rate in the next 2 years unless we enter a recession or depression!
What are the reasons that I think the higher inflation is more likely and the recession is less likely:
Milton Friedman: “Inflation is always and everywhere a monetary phenomenon"
Now let's Talk about the Biden administration monetary policy:
If I want to summarise it in one sentence: Willingness to spend as much as needed!
In monetary policy terms, Yellen is considered to be dovish — meaning she prefers looser policies, such as low-interest rates, that are meant to stimulate economic growth. (That's opposed to hawks, who are more concerned about inflation and therefore inclined to increase interest rates.)
Note: with this inflation rate, we are experiencing a negative interest rate! (listen to Yellen testify in front of Congres committee)
Gold and Inflation:
Gold is widely considered an inflationary hedge because its price in U.S. dollars is variable.
For example, if the dollar loses value from the effects of inflation, gold tends to become more expensive. So an owner of gold is protected (or hedged) against a falling dollar because, as inflation rises and erodes the value of the dollar, the cost of every ounce of gold in dollars will rise as a result. So the investor is compensated for this inflation with more dollars for each ounce of gold. (Investopedia)
From the technical point of view, Gold is now getting out of the consolidation after 15 months! and the rest could become very interesting!
Conclusion: I think gold has the potential to reach a new all-times high and cross 2080 in the next 24 months!
Best,
Moshkelgosha
DISCLAIMER
I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
You can review all my Inflation articles:
Today, the United States Inflation Rate YoY: 6.04% and the United States Core Inflation Rate YoY: 4.6%..!
While you see FED's chair talking about transitory and some others talking about deflation, numbers say something else! (I usually prefer listening to numbers than listening to people)
I think this could lead to a double-digit inflation rate in the next 2 years unless we enter a recession or depression!
What are the reasons that I think the higher inflation is more likely and the recession is less likely:
Milton Friedman: “Inflation is always and everywhere a monetary phenomenon"
Now let's Talk about the Biden administration monetary policy:
If I want to summarise it in one sentence: Willingness to spend as much as needed!
In monetary policy terms, Yellen is considered to be dovish — meaning she prefers looser policies, such as low-interest rates, that are meant to stimulate economic growth. (That's opposed to hawks, who are more concerned about inflation and therefore inclined to increase interest rates.)
Note: with this inflation rate, we are experiencing a negative interest rate! (listen to Yellen testify in front of Congres committee)
Gold and Inflation:
Gold is widely considered an inflationary hedge because its price in U.S. dollars is variable.
For example, if the dollar loses value from the effects of inflation, gold tends to become more expensive. So an owner of gold is protected (or hedged) against a falling dollar because, as inflation rises and erodes the value of the dollar, the cost of every ounce of gold in dollars will rise as a result. So the investor is compensated for this inflation with more dollars for each ounce of gold. (Investopedia)
From the technical point of view, Gold is now getting out of the consolidation after 15 months! and the rest could become very interesting!
Conclusion: I think gold has the potential to reach a new all-times high and cross 2080 in the next 24 months!
Best,
Moshkelgosha
DISCLAIMER
I’m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
You can review all my Inflation articles:
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Use the following link to access trading ideas: patreon.com/SniperTraderStocks?utm_medium=unknown&utm_source=join_link&utm_campaign=creatorshare_creator&utm_content=copyLink
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.