If gold trades off knee-jerk on a Euro rate cut, it will be a gift buy. But, I think the problem right now on gold is not a rate cut, it's talk of ECB selling gold to buy USD in interventions, as unfortunately it's the only reserve currency they could use.
More Sgt. Friday "just the facts" rebuttals into the Bernanke, "inflation is too low for my taste" nonsense. Bernanke said the following on intermediate goods inflation, "the 12 mo change in core PPI for IG has risen to plus 1.8%". Several points to be made from the Northern Trust figures.
northerntrust.com
First taking the new and important Dec. release, core IG PPI yoy is now 2.1%. Interestingly, the 3 mo core and all item PPI change is now 2.6%, and 2.7%. Again that excludes two vital subgroups, energy and food, which make up 17% (and rising) of consumer spending. PPI, all items is up 3.9%. Actually finished goods inflation for all items is up 4.0%. Obviously that's because food and energy must be used, and are "survival goods". Of course the Fed just chooses to ignore that and focus on core PPI of 1.0%. The PPI on crude goods (pipeline inflation) all items speaks for itself, with core up 20.8% yoy, all items 18.5%. Most of that is in the last three months, up a shocking 52.5%. That's the up-chuck moving through the python right now. These Fed Govs are on the deck of the Titanic, waving pom poms and leading cheers as the inflation tidal wave coming sweeping in on them. |
