Source – phxcapitalgroup.com
– “…This tells us point blank that higher inflation is seeping into the financial system. The markets know it too. Which is why Gold has erupted higher against every major currency”
We Now Have Confirmation That Inflation is Starting to Get Out of Control
Food inflation is spiking.
Yesterday the U.S. PPI and Core PPI (two key metrics of inflation) recorded a 0.4% increase in inflation for the month of September. This sounds like a very small move until you consider that it was largely due to just one component (food inflation) surging 1.2% over the same time period.
Why does this matter?
Because according to the Fed’s own research, food inflation is the single best predictor of future inflation in the U.S. And a 1.2% increase in a single month for food prices across the board (not just one area like meat or dairy) is a BIG deal.
This tells us point blank that higher inflation is seeping into the financial system. The markets know it too. Which is why Gold has erupted higher against every major currency (the $USD, the Euro, the Swiss Franc and the Japanese Yen).
And why not? After all, central banks and policy makers have gone NUCLEAR in their money printing in the last six months.
Consider the following…
In response to the Great Financial Crisis of 2008, central banks printed $7 trillion in new money from 2008 to 2012.
In response to the COVID-19 pandemic, they’ve printed almost as much money ($6 trillion and change) in 2020 alone.
Mind you, I’m just focusing on the U.S. here. Globally, policymakers have announced stimulus programs worth a jaw dropping $15 TRILLION. This comes to 17% of global GDP… in a single year.
All of this is going to unleash an inflationary story worse than anything we’ve seen in decades. And the time to prepare for this is NOW before it truly gets out of control