Portfolio Log-inTame, or Not So Tame Inflation; Goldman’s Dire Warning;The African Gold Rush
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10/12/12
The government’s latest release of producer prices (wholesale inflation) shows an overall calm picture IF volatile food and energy prices are factored out to arrive at what the economic wonks call “core PPI,” or what I call the “lithium version” of the inflation report.
Producer prices up on surging gasoline, core rate flat http://reut.rs/X08Ifb @ Reuters
Goldman Sachs knows what’s coming: Food Inflation To Surge, Goldman Warns http://www.zerohedge.com/news/2012-10-10/food-inflation-surge-goldman-warns …
Gold has been running in place recently, but a move above $1800 and beyond will be at hand as inflationary pressures increase and Central Bank printing continues. But it’s not so much that the a renewed bull market for gold awaits in the wings that’s import. Gold will be your hedge again the declining buying power of paper currency.
This blog is read by a worldwide audience. Whether it be euros, yen, ofr Federal Reserve Notes, etc., it is simple a race to the bottom for paper money.
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Interesting reading: BBC News – Africa gold rush lures children out of school http://bbc.in/ReIK3l
I have put this video up before, but not on the CAMI site. What happens when hyperinflation takes its toll? Watch this, directly from Zimbabwe.People turn to gold. http://youtu.be/Jt15F21jpN8
Even if this country doesn’t reach the point of Zimbabwe (I like to delude myself into thing we are not a Zimbabwe) let’s just that as the dollar declines, there are a number of other countries that would face similar Zimbabwe-like circumstances.
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Stocks at the time of the writing of this update are higher. JPMorgan pulled another rabbit out of the hat and post solid quarterly results. For now, I am still leaning bullish on stocks thanks to QE3. Nothing got any better on the European financial front during the past week, yet Wall Street has managed to climb the wall of worry.
Central Banks Can’t Inflate Markets Forever: El-Erian : http://bit.ly/TGmFjE
Forever? That’s a long time and is a reflection of the hubris that is built into the financial system and its participants. I wouldn’t be betting on Forever, but clearly the $10,000 an ounce gold barkers who have been barking about $10,000 gold for the last three years will be right someday, but it could take some additional time. Let’s at least get to $2,000 first and then we can re review the timeline to $10k gold.
Have a Weekend!
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Author Jim Kingsland
Market commentator with focus on Gold and Silver after long broadcast career at FNN, Bloomberg, and Fox. #RandomHouse published author on PMs. Jim has also been involved in projects for CAC and Coinplex.
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