Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.
Another set of bombshell inflation reports rattled markets this week.
On Wednesday, the Bureau of Labor Statistics released data showing consumer prices continue to rise at the fastest rate since 1982. The all-items index has risen 7% for the past 12 months ending in December. The energy index rose a staggering 29% over the last year.
Then on Thursday, the Producer Price Index came in with another month of increase for December to close out the year. Overall, final demand prices rose 9.7% in 2021. That represents the largest calendar-year increase since the data series came out in 2010.
PBS News Report: And the latest consumer price report shows that costs are continuing to spike for Americans across many categories. That is presenting real questions for the Federal Reserve, which is tasked with promoting stable prices.
Fox News Report: Now the consumer price index just surged by 7%, the biggest jump since the height of the Cold War. Meantime, Americans are flooding social media with photos of empty stores and the hashtag #BareShelvesBiden.
Pres. Joe Biden: Shelves are not empty. Experts, including Wall Street are suggesting that it's highly unlikely that it's going to be long term inflation that's going to get out of hand.
Inflation pains are pinching consumers’ pocketbooks. And after months of being told by the Federal Reserve and the White House that price increases are nothing to worry about, they are getting fed up with the lies and excuses.
President Joe Biden’s job approval rating has plunged to just 33%, according to Quinnipiac. Of course, he isn’t solely responsible for the inflation and supply chain disruptions plaguing the economy.
Congress rammed through massive fiscal stimulus in response to COVID. And the Federal Reserve stepped in to help finance the government’s borrowing binge. The central bank began purchasing $120 billion in Treasury bonds each month. And despite plans to taper its asset purchases, it will buy another $60 billion in January.
Central bankers are way behind the curve when it comes to monetary tightening. The Federal funds rate remains near zero. That puts the gap between the Fed funds rate and the inflation rate at a record high.
Holders of cash and low-yielding debt instruments are suffering hugely negative real returns. Negative real rates have persisted for quite some time. But they may not persist much longer before existing bag holders seek alternatives to preserve their purchasing power.
Gold will surely play an important role as a counter to our broken monetary system. Central banks around the world may steadily ditch U.S. dollars for gold in their reserves. And individuals can opt to go on their own personal gold standard or bimetallic standard by holding physical gold and silver as money.
Gold and silver prices moved higher this week as the U.S. dollar dropped on the troubling inflation reports. Gold is up 1.2% since last Friday’s close to trade at $1,825 per ounce. Silver, meanwhile, is pulling back a bit here today but still shows a weekly gain of 2.3% to bring spot prices to $22.93 an ounce.
Turning to the platinum group metals, platinum is up 1.0% this week to trade at $981. And finally, palladium checks in at $1,905 after retreating 3.0% for the week.
In other news, we’re pleased to announce that Money Metals has just been named the “best overall” dealer in the United States for 2022 by Investopedia.com, a top authority in the world’s investment industry.
As pointed out by Investopedia, our customer-centric focus has translated into highly competitive pricing, personalized service, a pathway for new investors, and one of the best online reputations -- making Money Metals their choice as the best overall online metals dealer.
The top investment news and information hub made special mention of Money Metals’ secure, insured depository (one of several integrated services that no other major U.S. dealer offers).
We're deeply honored to have received this incredible distinction from the world’s leading investment authority, especially given the U.S. precious metals industry is so competitive.
While Money Metals is known for fair, transparent pricing and fast delivery of customer orders, we’re especially proud of our no-pressure sales approach, wide array of services, public policy initiatives, and significant educational efforts.
Investopedia is the world's leading source of financial content on the internet, ranging from market news to retirement strategies, investing education, and insights on financial products. Investopedia has a reputation for providing unbiased and accurate investment information, and its website is visited by literally tens of millions of investors worldwide each month.
Thank you to our dedicated readers and listeners, and especially our Money Metals customers… it’s because of you that we do what we do. And you have our word that we will go all out every single day to keep earning your business and your trust. THANK YOU for helping make Money Metals the very best precious metals dealer in America!
As I mentioned a moment ago, Investopedia lauded Money Metals’ high-quality news and educational content. A big part of our mission is to promote awareness of sound money to the general public, extending beyond our own customer base.
Money Metals backs the Sound Money Defense League, which advocates for sound money legislation at the state and national level.
2021 was a big year for sound money efforts across the United States. Several state legislatures advanced bills to end sales taxes on gold, silver, platinum, and palladium coins and bars. And now 42 states have removed some or all taxes from the purchase of precious metals.
Building on last year’s momentum, there are already promising new sales tax repeal bills under consideration by lawmakers in Kentucky, Mississippi, and Tennessee.
States typically don’t tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments. Taxing precious metals is an unfair penalty on certain savers and investors. It’s also counterproductive since such taxes drive business activity into neighboring states that don’t impose them.
Individual states cannot bring soundness to America’s monetary system on their own. Regardless of what policies they enact, the Federal Reserve will continue to recklessly expand the currency supply.
With the Consumer Price Index running at its highest rate in 40 years, inflation has become the pressing economic issue of our time.
Citizens can protect themselves from the ravages of Fed-fueled inflation by securing a significant portion of their wealth in hard assets including gold and silver.
Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great weekend everybody.
About the Author:
Mike Gleason is a Director with Money Metals Exchange, a precious metals dealer recently named "Best in the USA" by an independent global ratings group. Gleason is a hard money advocate and a strong proponent of personal liberty, limited government and the Austrian School of Economics. A graduate of the University of Florida, Gleason has extensive experience in management, sales and logistics as well as precious metals investing. He also puts his longtime broadcasting background to good use, hosting a weekly precious metals podcast since 2011, a program listened to by tens of thousands each week.