Hey There Income Hunters,
Not only is the Fed keeping its foot on the gas when it comes to quantitative easing (QE) — our central bank is turbo-charging it and already monetizing the debt.
First of all, the Fed’s most dumbed down inflation measure — the personal consumption expenditure (PCE) — was released on Friday and shows 12-month inflation at 4%.
Now, we know J-Pow won’t change the Fed’s stance, since he stated the push would remain on until the US economy reaches full employment.
Yet, the new data coming out shows inflation is not only real and here to stay, but it’s also creeping into wages, which could take inflation to a whole other level and make it stick even longer term…
Notice the latest numbers on private sector salaries and wages …
Wait until you see how badly the Fed has been deceiving Americans — but it’s not too late to make sure you crush them at their own game!
I took a look back at what the Fed was saying a year ago re: letting inflation run hot. Last September, Dallas Fed President Robert Kaplan said he would be comfortable with inflation running a “little bit” above the 2% inflation target:
“And for me, a little bit means a little bit,” or about 2.25%, Kaplan said during an interview with Bloomberg TV. “I still think price stability is the overriding goal and this framework doesn’t change that.”
This was part of J-Pow’s “new” Fed Framework (which he will flip/flop on any time it suits his needs).
Now, we have the Fed QE policy increasing even though J-Pow was recently talking about a taper strategy …
In three months, Treasury purchases are up 25%. There is no limit on how high this number can go, and all J-Pow says is “at least” $120 billion.
There is one sure way to take advantage of his insanity and you’ll want to get on board before the train leaves the station …
Gold Price Rises Are Building
There are three forces at work that will drive Gold much higher in the months ahead …
- Wages and salaries are just beginning to heat up, and wage inflation can be very sticky.
- Rising home prices will begin to translate into high owner-equivalent rents, which will add a significant boost to CPI.
- The Fed has boosted its US Treasury purchases through its QE policy.
These forces will widen the gap between 10-year real rates and gold even further …
SPDR Gold Trust ETF (Ticker: GLD)
GLD will repeat the blast-off of 2019 after breaking out of the same pattern …
Today GLD is being held down by remaining paper gold traders that need to unwind short COMEX futures positions. See Intel on Silver and Gold for more details.
But once it breaks, the ETF will soar to new all-time highs …
Bring It Home
I am not surprised to see that the Fed is already purchasing more bonds from the banks. It’s the only toll they have and they’ll use it even though it doesn’t help growth.
As always …
Live and Trade With passion My Friends,