Markets Taking Inflation Seriously

Now as it gets very difficult to buy inflation transitory view, there is direct evidence that the market is taking inflation much more seriously. Stocks were down but so was long-dated U.S. Treasuries. Normally when stocks decline, money moves into the U.S. debt market, but not this week so far, as evidenced by a decline of 0.84% in TLT. But as you can see from the table above, commodities, silver, and gold all advanced.Signs of a mounting inflation problem are everywhere. My own IDW surged to a new high at 192.01. My IDW includes financial inflation, labeled “good inflation” by those getting rich on Wall Street, as well commodity inflation otherwise known as “bad inflation” by the boys and girls on Wall Street who hate to have anything like gold or high interest rates get in the way of their financial orgy. But sooner or later the laws of nature must prevail. So interest rates surged higher this week, as did gold and silver on Tuesday’s PPI print at record highs of 8.6% year over year, the CPI as reported on Wednesday jumped to 6.2% year over year compared to the markets expectations of 5.9%. It’s a global issue for sure because as Tuesday turned to Wednesday here in America, Chinese producer prices were reported to be rising at their fastest pace in 26 years. Then on Wednesday morning U.S. consumer price data shocked the markets.

I was alerted to the inflation news as I watched the Kitco 24 Hour Spot Gold chart skyrocket higher in a matter of minutes (red line) during my Delta flight to the Metals Investor Forum. Michael’s number to cement the next major bull run for gold is a close any week this quarter at $1,825. With gold closing at $1,861 on Nov. 11, the odds look pretty good that the next bull run for gold and shares covered in this letter are pretty strong. This week the only trade I made was to increase my holdings of Red Pine Exploration. A reading of what I passed along regarding the company’s latest assays should explain why I added some Red Pine.

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.