RE:Stagflation is herenozzpack wrote: Latest CPI shows CPI remaining higher while economic growth in the US in Q1 was anemic.
Stagflation is the descriptor and the last time this happened.. 1975- 83....POG skyrocketed .
Which is why POG continues to rise.
The FED is trapped.
It cannot raise rates when economic growth is anemic so high CPI cannot be attacked by that move.....even worse, as in the 1970s, CPI is not caused by demand but by supply..but it cannot cut rates as that would boost demand.
So, we are in a goldilocks situation for the POG.
There will be volatility, but high POG seems assured ..
we will see higher rates at some point in this cycle 2 to 4 % higher than inflation rate will be the bank rate in Canada and same for the Fed rate in the USA
higher interest rates higher gold prices higher inflation higher unemployment all will happen
in the 70s rates went up inflation went up gold went up all cooled off a bit then all went parabolic
rates over 20 % inflation 16% gold to 850 this time will be similar rates could still double inflation could still double gold could still double unemployment could still double
Iam not saying it will but that is going to be the direction it is all heading in my opinion
gold and interest rates peak within months of each other both are not finished yet