Gold retreats but holds above all-important $1800 level
Twitter founder Dorsey warns ‘hyperinflation is going to change everything’

(USAGOLD – 10/26/2021) – Gold retreated in early trading this morning but continued to hold ground gained above the all-important $1800 level. It is down $4 at $1805. Silver is down 18¢ at $24.47. Inflation has become a top concern at the corner of Wall Street and Main over the past several weeks, and the shift in sentiment has helped pushed the precious metals higher. John Greenwood and Steven Hanke offered a numbers-driven account of inflation’s prospects in a recent Wall Street Journal article.

“Out of the total $10.6 trillion in new money,” they wrote, “real GDP growth will drain roughly $1.4 trillion. Another $1 trillion will flow down the money demand drain. Since the amount of money flowing into the bathtub far exceeds the two outflows, the excess money in the tub—around $8.2 trillion—will hit the inflation overflow drain. The huge monetary expansion—$5.5 trillion already in the bathtub—is starting to reach the overflow. Persistent, not transitory, inflation will be with us for the next two to three years.”

Twitter founder Jack Dorsey was even more emphatic about inflation’s prospects. “Hyperinflation is going to change everything,” CNBC recently quoted him as saying. “It’s happening. … It will happen in the US soon, and so the world.”

Chart of the Day

United States Consumer Inflation Rate
(Bureau of Labor Statistics, September 2021)

bar chart showing the consumer inflation rate for the US through September 2021
Chart and commentary (below) courtesy of TradingEconomics.com

Chart note: It is difficult to ignore the swift gains in inflation posted over the past year. The rate has more than tripled since the summer of 2020. 

 

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