Friday, April 8, 2016

On the cusp of 2008: Inflation at its lowest levels since just before the financial crash

Because the Treasury Department and the Federal Reserve decided to base our economy on debt around four decades ago, the most important indicator they must at all costs keep growing is that of inflation.  This is because to afford to either pay off or rollover the debts they accumulate, they must continue to increase the money supply to support this credit expansion.

But as we know from history, these policies have one major achilles heal, and that of course is the gold.  And it is why for the past six years of QE and Zero Interest Rates the Treasury and central banks have had to manipulate the price to keep it down, and keep it from revealing just how insolvent the system really is.

Today’s chart shows the annual inflation rate of advanced economies, which includes the U.S., Europe, and Japan. Inflation measures how fast prices for everyday goods and services are rising. Last year, inflation fell to its lowest level since the financial crisis. This worries central bankers. 
You see, central bankers don’t view inflation like most people do. They think inflation helps the economy grow. For the past eight years, they’ve done everything they can to stoke inflation. They’ve slashed interest rates. They printed trillions of currency units.
None of this has worked. Prices for everyday goods and services have barely increased. 
Central bankers are becoming desperate to increase inflation. We expect them to “double down” on the same bad policies they’ve been using since 2008. That could mean more interest rate cuts...more QE...or even helicopter money. 
Owning physical gold is the best way to protect your money from these reckless government policies. - Casey Research

Since the middle of 2014, increases in the money supply have resulted in a point of diminishing returns, where it takes on average $14 new dollars just to create $1 new dollar in GDP growth.  And this can be seen even today on April 8 when the Atlanta Fed lowered its estimated for Q1 GDP for the third time in one week, and down originally from 1%, to .1% in three separate cuts.

There is little more that the central banks can do to stabilize the economy, the dollar, or their insurmountable debt bubble.  And the only thing that you as an individual can do is protect yourself from what is coming by taking your dollars and putting them into the one asset that functions well in deflationary times, and even better during inflationary ones.

Gold.

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