STEALTH INFLATION
Economics / Inflation Jan 25, 2023 - 10:09 PM GMTGold and especially Silver are coming alive, the sleepers finally waking up to the INFLATION that they have been waiting for a decade to materialise. Where most are focused on the smoke and mirrors annual rate of CPLIE that the clueless mainstream media will latch onto to indicate that the Fed is winning and inflation is being defeated as the annual rate of CPI falls as the economy weakness..
However, most will remain completely blind to the actual inflation trend underway that I expect will deliver waves of COMPOUNDING inflation over the course of this decade where the current spike high of 9% CPLIE was merely the first wave! So yes the headline rate of annual inflation WILL SUBSIDE to wards 3% during 2023. However, CPLIE will MASK the actual INFLATION PAIN that most will experience as will be illustrated by the relentless climb in the 10 year inflation rate, which will climb higher and higher fed by the next CPI wave to above 9% peaking once more some time during 2025. and with it will the PAIN most experience as their earnings are unable to keep pace with prices in the shops which will so much civil unrest, rioting, looting and burning commercial districts especially during the hot summer months..
And it is this STEALTH INFLATION which will increasingly make itself manifest in assets that cannot be easily printed such as housing, certain stocks and GOLD AND SILVER!
The consensus narrative is that rising interest rates are bad for Gold and Silver so one would expect the opposite to happen during 2023, i.e. rising rates coupled with cooling inflation should act to dampen the prospects for Gold and Silver, however the trend going into the end of 2022 has been one for the emergence of a stealth bull market in both precious metals, especially silver.
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By Nadeem Walayat
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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
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