Real World Inflation

The financial markets enjoyed a great week at the expense of the monetary metals and commodities. And in his March 25, 2021, missive, Michael Oliver’s work suggests that commodities are likely to become involved in a choppy arm-wrestling consolidation at or around current levels for the next month or two although it is not unreasonable to wonder just how much impact the lack of transport through the Suez Canal will have on prices at the same time massive stimulus is being released in America. But given the torrid pace of inflation in the real world as displayed on the following chart, some sideways action would seem reasonable and welcome. Our government can talk about 2% inflation, but whose kidding who? The chart on your left gives you an idea of the massive inflation in all manner of commodities, currencies, and financial markets. And indeed, as March draws to a close, my IDW is also rapidly hitting new highs.

By the way, there is an excellent March 24 article showing just how dramatically bullish U.S. deficits are for gold that you can read at by McClellan Financial publicans. I will pass along the chart toward the end of this issue that makes the point. But the chart suggests that the massive rise in deficits since COVID-19 paid us a visit has barely begun to move. It suggests an explosive rise in the yellow metal is dead ahead.

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