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Tag Archives: Original Analysis

Mainstream Suddenly Realizes Raising Interest Rates in a World Buried in Debt Might Be a Problem

The Federal Reserve is talking about raising interest rates. But the US economy is buried under piles of debt. I’ve been asking how this is going to work for months. Apparently, the question has finally occurred to the mainstream.A CNBC article declared, “Fed rate hikes will intensify a global debt crisis, research warns.”Well, yeah. Duh.According to the study came from a UK non-profit the Jubilee Debt Campaign, debt payments rose in developing countries by 120% between 2010 and 2021....

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Joe Biden’s Economic Dumb-Guy Argument

President Joe Biden is running around trying to take credit for a “booming” economy. It’s the ultimate political dumb-guy argument.Politicians tend to play to the lowest common denominator and Joe Biden is no exception.In a social media post, Biden claimed credit for an improving labor market, comparing various jobs numbers today with the same data a year ago. “One year in, America is on the move again,” Biden exclaimed.If you take these numbers at face value – and you’re a dumb guy – you...

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Biden Is Going to “Fix” the Meat Supply Chain? The Government Broke It Decades Ago

Elizabeth Warren and others are running around blaming inflation on greedy corporations’ “price gouging.” Of course, this narrative falls apart when you realize producer prices are rising faster than consumer prices. If anything, producers are letting consumers gouge them by not passing on all of their rising costs.But the “greedy corporation” narrative is great for politicians. It lets them deflect the fact that their reckless borrowing and spending is the problem.It’s also empowering...

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Peter Schiff: The Year of Living Dangerously

With 2021 now in the rear-view mirror, I believe that future financial historians may regard it as the year of peak speculation.While the history of American markets is littered with periods of irrational exuberance, none of those episodes can really match the current market for outright delusion and the blatant disregard for basic investment discipline. Where to begin?It was the year that brought us “meme stocks,” companies whose share prices skyrocketed precisely because their business...

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GDP Creates the Illusion of Fed-Fueled Economic Growth

Joe Biden keeps touting the “booming” economic recovery. And of course, he’s taking credit for it. But is the economy really booming?If you look at GDP growth, it certainly appears the US economy is in the midst of a robust recovery. But economic growth is relative. And when your baseline is an economy that was shut down, any growth looks good. Of course, there is going to be growth from virtually zero.But there is an even deeper problem with using GDP to gauge economic health. Like the...

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Peter Schiff: The REAL Reason Gold Hasn’t Gone Up and Why It Ultimately Will

Inflation in the US is at historically high levels.So, why hasn’t gold taken off?We hear this question over and over again. In this video, Peter Schiff answers this question and explains why the markets will eventually wake up to their misperception.That’s the key word – misperception.Taper tantrums and fear of Fed rate hikes have distorted perception in the markets. People are selling gold when they should be buying gold on the dips.And at the root of this misperception...

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Ireland Buys More Gold as Inflation Pressures Mount

Ireland has added more gold to its reserves as inflation worries mount.According to the latest data, the Central Bank of Ireland purchased $88 million ($78 million euros) in gold in November, adding to the two tons it added to its holdings in previous months. With the latest purchases, the Irish central bank has boosted its gold reserves by over three tons in a three-month period. Up until late last year, Ireland had not purchased any gold since 2009. With its gold-buying in recent...

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What Happens If the Fed Takes Its Thumb Off the Housing Market?

We talk a lot about how the Fed keeps its big fat thumb on the Treasury market. But it also has its big fat thumb on the housing market. And if the Fed really does follow through with its taper and its plans to shrink its balance sheet, it will have a big effect on the housing market.If you’ve ever held something under tension down with your thumb and suddenly release it, you know what happens.Pop!As of October 2021, housing prices had skyrocketed over 18% year-on-year. Housing prices are...

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Consumer Debt Charts Biggest Gain in 20 Years

The Federal Reserve is talking about raising interest rates. Well, that’s going to be a big problem for American consumers who are running up debt at a torrid pace. This is yet another reason why the Fed can’t do what it’s claiming it will do.Consumer debt jumped 11% year-on-year in November, according to the latest data released by the Federal Reserve. It was the biggest single-month jump in consumer debt in 20 years.Total consumer debt jumped by $39.9 billion in November. That doubled...

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REAL Interest Rates: The Missing Puzzle Piece the Mainstream Is Ignoring

Inflation is sizzling hot. Gold has historically served as an inflation hedge. So, why hasn’t gold caught a bid?In a word, confusion.Taper tantrums and fear of Fed rate hikes have generated massive confusion in the markets. People are selling gold when they should be heavily buying gold in the dips.And at the root of this confusion is the failure to account for interest rates.Real interest rates equal the nominal rate (the numbers quoted on the news) minus inflation. Today, the nominal...

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