Doug Casey has an interesting article on bond prices and inflation. He is quoting various experts that bond prices topped out this Summer as yields began to rise. Yields and prices vary reciprocally. As the FED is starting to end its financial repression, prices are rising. Add to this the two major promises of the Trump administration: 1. make things in America and 2. infrastructure building. Both of these sound good, but if our goods will be made in America, they will be made by American workers whose wages are much higher that the wages of Asians or Mexicans. Prices will go up. And the buildout of infrastructure will require a lot of money. Where will it come from? Still, having low prices did little for those with no jobs and little income. The Liberals liked that, because no jobs meant more government assistance, more votes for them.
Another contributing factor of inflation is the rise in commodity prices. Here is an illustration of commodities:
In accordance with these new realities, the FED hiked interest rates and promised three more for the coming year and four more for the year after. Gold and Silver took a big tumble. Fret not, those prices will come up. When? After the big traders forced everyone out of these things.
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