Shelves begin to empty as supply chain warps under inflation
Another round of explosive inflation reports rocked the markets this week.
On Wednesday, the Bureau of Labor Statistics released data showing that consumer prices continue to rise at the fastest rate since 1982. The all-items index rose 7% in the past 12 months ending in December. The energy index has increased by 29% over the past year.
Then on Thursday, the producer price index entered with another month of increase for December to close the year. Overall, final demand prices rose 9.7% in 2021. This represents the largest calendar year increase since the data series was released in 2010.
PBS News Report: And the latest consumer price report shows that costs continue to climb for Americans in many categories. This raises real questions for the Federal Reserve, which is responsible for promoting stable prices.
Fox News Report: Now the consumer price index just rose 7%, the biggest jump since the height of the Cold War. Meanwhile, Americans are flooding social media with photos of empty stores and the #BareShelvesBiden hashtag.
Close. Joe Biden: The shelves are not empty. Experts including Wall Street suggest that it is highly unlikely that it is long-term inflation that will spiral out of control.
The pains of inflation are pinching consumers’ wallets. And after months of being told by the Federal Reserve and the White House that price increases are nothing to worry about, they are tired of lies and excuses.
President Joe Biden’s jobs approval rating has dropped to just 33%, according to Quinnipiac. Of course, he is not solely responsible for the inflation and supply chain disruptions plaguing the economy.
Congress imposed massive fiscal stimulus in response to COVID. And the Federal Reserve stepped in to help fund the government’s borrowing spree. The central bank has started buying $120 billion in Treasury bills every month. And despite plans to scale back its asset purchases, it will buy another $60 billion in January.
Central bankers are way behind the curve when it comes to monetary tightening. The federal funds rate remains close to zero. This puts the gap between the federal funds rate and the inflation rate at an all-time high.
Holders of cash and low-yielding debt securities experience extremely negative real returns. Negative real rates have persisted for some time. But they may not persist long before existing bag holders look for alternatives to preserve their purchasing power.
Gold will surely play an important role as a counterweight to our failing monetary system. Central banks around the world could routinely ditch US dollars for gold in their reserves. And individuals can choose to use their own personal gold standard or bimetallic standard by holding physical gold and silver as their currency.
In other news, we are pleased to announce that Money Metals has just been named the “Best Overall Dealer” in the United States for 2022 by Investopedia.com, a leading authority on the global investment industry. .
As Investopedia pointed out, our customer-centric focus has resulted in highly competitive pricing, personalized service, a pathway for new investors, and one of the best reputations online – making Money Metals their choice in as the best online metal dealer.
The leading center for investment news and information made special mention of Money Metals’ secure and insured deposit (one of many integrated services that no other major US dealer offers).
We are deeply honored to have received this incredible accolade from the world’s leading investment authority, especially since the US precious metals industry is so competitive.
While Money Metals is known for its fair and transparent pricing and prompt delivery of customer orders, we are especially proud of our no-pressure sales approach, wide range of services, public policy initiatives and efforts important educational.
Investopedia is the world’s leading source of financial content on the Internet, ranging from market news and retirement strategies to investment education and financial product information. Investopedia has a reputation for providing unbiased and accurate investment information, and its website is visited by tens of millions of investors worldwide each month.
Thank you to our dedicated readers and especially to our Money Metals customers… it’s thanks to you that we do what we do. We will do everything we can every day to continue to earn your customers and your trust. THANK YOU for helping to make Money Metals the best precious metals dealer in America!
As I mentioned a moment ago, Investopedia praised Money Metals’ high-quality news and educational content. A big part of our mission is to promote healthy money awareness to the general public, beyond our own customer base.
Money Metals supports the Sound Money Defense League, which advocates for sound money legislation at the state and national level.
2021 has been a big year for strong financial efforts across the United States. Several state legislatures have introduced bills to end sales taxes on gold, silver, platinum, and palladium coins and bullion. And now 42 states have removed all or part of the taxes on the purchase of precious metals.
Building on last year’s momentum, promising new sales tax repeal bills are already being considered by lawmakers in Kentucky, Mississippi and Tennessee.
States generally do not tax the purchase of stocks, bonds, ETFs, currencies and other financial instruments. Taxing precious metals is an unfair punishment for some savers and investors. It is also counterproductive since such taxes push business activity into neighboring states that do not impose them.
Individual states alone cannot bring strength to the US monetary system. Regardless of the policies they adopt, the Federal Reserve will continue to recklessly increase the currency supply.
With the consumer price index at its highest level in 40 years, inflation has become the pressing economic problem of our time.
Citizens can protect themselves from the ravages of Fed-fueled inflation by securing a significant portion of their wealth in durable assets, including gold and silver.