EC An Inflationary Fire; The Key Catalysts

US stocks, bonds, and real estate are in the late stages of a financial market inflation cycle. A new cycle is beginning, and it is the inflation of Main Street America.  

In just a few short months, inflation has become the biggest concern for most money managers!

Will that concern grows to a trigger point where it becomes an institutional stampede out of US stock and bond markets (and perhaps even real estate) and into the gold and silver mining stocks?

It’s likely just a matter of time, and when it happens, the price “geyser” would dwarf anything that occurred in the 1970s. That’s because so much money has been printed by the Fed. 

The money sitting in stocks, bonds, and real estate is a product of insane central bank activity, and it’s not just in America, but in Japan and Europe too.

Double-click to enlarge this US stock market chart.

The stock market is struggling, even with the government announcing a three trillion dollar “recovery” plan. Why?

The answer is: inflation concerns. Institutional money managers cheered as the Fed printed no money for Main Street but threw trillions at financial markets.

While the Fed is still doing nothing for Main Street, the government is starting to get involved in allocating fresh trillions in printed and borrowed money to the real economy rather than just to the financial markets.

I’ve argued that the Fed could print $100-$300 trillion and that money would not be inflationary for Main Street… because it would never reach the hands of the average citizen. 

A lot of gold investors became frustrated in the 2011-2018 period because they watched the money supply soar, but inflation moved only modestly. 

Even when using the Chapwood/Shadow Stats indexes, inflation only rose to 7%-20%, which seems low given the amount of money printing. Using the government’s CPI index (aka the George Orwell index), inflation stays under the 2% threshold.

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