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The Threat of Surging Inflation

Gold last traded at $1,233 an ounce. Silver at $18.02 an ounce.

NEWS SUMMARY: Precious metal prices traded higher Wednesday on a weaker dollar and Fedspeak. U.S. stocks traded mostly lower on political uncertainty and hawkish Fed meeting minutes.

Gold Standard Needed Now More Than Ever? -Alan Greenspan/Kitco
"It would be best not to be short-sighted when it comes to gold; at least that is what one former Fed chair says. '[T]he risk of inflation is beginning to rise...Significant increases in inflation will ultimately increase the price of gold,' noted Alan Greenspan, Federal Reserve chairman from 1987 to 2006, in an interview published in the World Gold Council's Gold Investor February issue. 'Investment in gold now is insurance. It's not for short-term gain, but for long-term protection....We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.'"

In 2017, Mr. Greenspan appears to have arrived at the same conclusion he espoused a half century ago, prior to serving as Fed Chairman... "An almost hysterical antagonism toward the gold standard is one issue which unites statists of all and economic freedom are inseparable." -Alan Greenspan, 1966 White Paper-Speech

inflation Why inflation threatens the middle class -Marketwatch
"Buffeted by slow growth and too few decent paying jobs, Americans now have to deal with more inflation. In January, consumer prices rose 0.6%....Yet, economic growth is not likely to accelerate enough to support wages that rise as fast as prices going forward. The Federal Reserve will be faced with an uncomfortable choice - raise rates too quickly to combat inflation or continue printing more money in hopes of further supporting economic growth. Here are four things to know about higher inflation. 1. More Money Won’t Boost Growth, 2. Easy Money and High Inflation Steals from the Elderly, 3. Federal Policies Make Too Much Inflation Certain, 4. A Higher Minimum Wage Will Only Make Matters Worse."

BlackRock: Inflation Is Surging, So Buy Some Gold -ETFDailyNews
"Russ Koesterich discusses the signs that inflation is rising faster than many expect, and what that means for your portfolio. Like the proverbial frog that does not notice the rise in water temperature until it's too late, investors seem to be experiencing a similarly stealthy rise in inflation. Changes in headline inflation measures suggest a gentle firming in prices. However, underneath the surface there is evidence that inflation may continue to rise past the steady 2% nirvana that central banks prefer. 'Consider the following: Housing costs are now rising at the fastest pace in nearly a decade... Medical inflation is not as contained as many had hoped... Wages are rising... Consumer inflation expectations are also starting to tick higher. None of this signals '70s style inflation; it does suggest inflation may surpass still modest market based expectations... To the extent realized inflation and inflation expectations continue to rise, investors may want to consider several themes in their portfolios ... Finally, should inflation expectations rise faster than nominal rates, gold is likely to continue to merit a place in most portfolios.'"

Currency Manipulation Is a Real Problem -Wall Street Journal
"Passionate defenders of the 'global rules-based trading system' should be wary of thinking their views are more informed than President Trump's. He has been branded a protectionist and thus many conclude he is incapable of exercising world leadership. Meanwhile, those who embrace the virtues of global free trade disregard the fact that the 'rules' are not working for many American workers and companies. Certainly the rules regarding international exchange-rate arrangements are not working. Monetary integrity was the key to making Bretton Woods institutions work when they were created after World War II to prevent future breakdowns in world order due to trade. The international monetary system, devised in 1944, was based on fixed exchange rates linked to a gold-convertible dollar. No such system exists today. And no real leader can aspire to champion both the logic and the morality of free trade without confronting the practice that undermines both: currency manipulation."

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