J Taylor’s IDW Is Breaking Out!

My Inflation/Deflation (IDW) is designed not to track inflation as the government defines it, but rather to gain a sense as to whether global prices of everything are inflating or deflating as measured by the world’s fraudulent world currency, namely the dollar. The system almost imploded out of the control of the banking elite in 2008-09 but a massive increase in global monetary fraud delayed total economic destruction. Quantitative easing has led to a breakdown in price discovery for capital, so a global depression is a given. But no central banker dare allow interest rates to find their market equilibrium because he/she would be blamed for a depression far greater than anything our grandparents experienced in the 1930s and far, far worse than the brief decline in 2008-09, frightening as that was.

I started the IDW on Jan. 31, 2005. The performance of each of the items within the Watch is displayed in the chart above on your left. With the exception of monetary metals (gold, silver and copper), commodities during this time frame have been in a huge decline, evidenced by the declines in oil and the Rogers Raw Materials Index. Michael Oliver’s commodities work, which is based on the Bloomberg Commodities Index, suggests commodity prices are now starting to break out. The government doesn’t consider rising stock prices as inflation, but I do which is why I have included equities from key sectors and key economies (India, China and the U.S.) in my IDW. Now, central bankers are going to have a real problem. If they raise rates high enough to decrease commodity prices, we will head into a massive depression sooner rather than later. So what you can expect are rising nominal rates but very low, if not declining. real rates of interest. Nothing could be more bullish for precious metals and commodities in general. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.