Consumer prices in the US increased 2.7% percent year-on-year in Feb 2017, following a 2.5% rise in Jan. It was the highest inflation rate since Mar 2012 boosted by gasoline prices. Lets look at the chart of inflation firstly over 5 years then 10 years.
Both charts resemble the gold chart? In fact the two lows in 2015 almost line up with the ICL’s (with a correction mid 2016)
There is couple of things we can take away from the figures namely consumer prices are on the rise, the FED wants to keep a check on inflation so expect more rate increases, and gold may well be sniffing out long term inflation. The incremental increases are small but these are charts we should be monitoring.
Also note that gasoline was a key factor. After we get a YCL (refer Surf’s post) I expect oil prices to increase which can only add to gasoline prices and inflation. Here is the WTIC chart over the last 3 years…
Here are a few charts from today and I will likely add to them later this evening. Let me just say that the initial moves out of Fed day are often head fakes, only to be reversed within a few days. Not always, but history shows us that is often … Continue reading →