JUST IN: Gold and silver prices dump following higher-than-expected inflation report, wiping out a combined $700,000,000,000.
Outside of fuel, the data was inline. Seems like this is an overreaction? The US 2yr treasury also popped on the news. I’d expect that to be back down by the week.
That’s EXACTLY correct. The US is being slowly turned into Russia. This is the playbook of Putin and the oligarchs. Enjoy the unnecessarily expensive future.
A totalitarian dictatorship pretending to be a democracy, with an ignorant population that mistakes fatalism for rebellion and basic humanity for ignorance
An atavistic longing for one's youth might be one reason? The relative simplicity of autocracy can seem effective for those who have never had an interest in civic life? There are several possible reasons, the refugee and immigrant experience...
An aversion to political civic life is one consequence of being Soviet.
It's def worth studying as we are clearly being pushed into a similar direction by the right wing forces afoot.
I heard this before and I really have come to believe it. The thing about democracy is that it is not a tap that you turn on to get water. It is a well that you must draw from every single day.
It's not easy, you don't always get what you want, but you really have to be committed to the idea that if we all work together we are all going to be better off together.
I think the fundamental problem with the United States is that we have forgotten that premise, or maybe a good chunk of the white Americans never really believed it in the first place.
Like you said, autocracy is easy and if you're in the group that has a not terrible life. It's easy to believe that your life can't be any better.
It's so true. I'd say more like brushing your teeth.
It's so bad here in Fl...they've convinced their followers that "cooperation" means "communism".
No amount of "since the time of harnessing fire, humans have depended..." logic shifts them.
Separating the sheep from the herd and telling them the wolf is a cocker spaniel.. something orange and hairy:)
Can you elaborate on how the gov can fudge the CPI numbers? I understand the ‘basket of goods’ can be changed to reflect a lower starting point, any other ways?
They can't, people who can't explain the difference between CPI and PCE without ChatGPT are trying to explain to you why the system they can't highlight is flawed.
Which, 100%, is the point of conservative governance. Reduce institutional trust, even though these folks would probably be against conservatism right now at least.
Rather, a better point and one that is backed up by actual economists and financial managers, is that CPI doesn't accurately reflect all of the costs associated with living, and there is substantial variation in felt inflation between different income levels. Someone making $30k a year might experience 15% inflation while someone making $100k is closer to the 3.5%, for example.
When inflation rises, people expect the Federal Reserve to raise interest rates. Interest rate is basically the cost of borrowing which means it would be more expensive for the government and companies to borrow money. And if treasury and corporate bonds have high yields, there is less incentive to own gold. Gold gives you no return or dividend. Owning gold only makes sense when the real interest rate (nominal interest minus inflation) is negative.
Yea this makes sense in a normal economic environment, which we aren't in. The bond market is unsustainable as is. Golds gonna surprise the people playing by the old rules.
In addition Trump hates high interest rates. You will hear lots of criticism and threats to try to prevent increased rates. Expect longer delays in increasing rates and smaller increases.
He is getting impeached, but not by December. The newly elected members do not get their seats until January. And he is not getting removed at all. We've seen how impeachments go, there is no way two thirds of Senate convicts him.
yeah, democrats would be stupid to impeach him if they don't have the votes. just gives that orange puke another media cycle proclaiming "totally vindicated" when senate can't secure the votes for a trial
My best guess is rates the fed sets. If the fed keeps raising them to combat inflation, these higher rates make other investments more attractive than precious metals.
Iran war. They are using gold as it is intended. To fund their expenses, governments in the Middle East are selling gold that they had saved up to make up for lost oil revenue.
Inflation is high because the economy is running hot. Nominal GDP growth in the US is 8-10%. Stocks follow earnings and since earnings are so high, stocks are are following, bumping up at new all time highs. As a result, investors want to own stocks for the highest return. Gold and treasuries are now boring and investors need to be paid more in treasury yield to be convinced to take risk off the table.
I wish Reddit would understand this 😂 it’s as simple as that. Stocks ARE inflation, inflation IS stocks. Companies charge more (inflation) revenue is higher, stocks go up.
No, stocks are representative of asset inflation, which is the REAL inflation the CPI doesn't take into account. Stocks, PMs, real estate, etc. This is why CPI and consumer sentiment are so often at odds, is my theory.
CPI is an index, which allows substitution and weighted averages, and excludes asset inflation.
That's it.
Stocks, real estate, PMs, can all go up and not touch CPI. Your actual healthcare cost can go up 300% but because its only weighted at 20% of the basket won't fully represent that, and takes overall price without subsidy so doesn't include reduced government benefits. Same can be applied to energy or fuel as well. And 3.7% being an index means the actual range can be much higher, especially depending on income. I believe the Interquartile range is as high as 6-9% points, meaning one group can be experiencing an inflation of 9-13% while the lower range could be as little as 2-3%. This highly correlates to income as well.
The number, is the number, is the number. As it has been since we started tracking it in the 70s
That's why this administration fired people from the US Department of Labor who put together the CPI numbers shortly after Trump came into office. Trump is cooking the numbers and I highly doubt they are using anything you just wrote above.
...You didn't read what I wrote then. I explained why CPI doesn't accurately capture felt inflation, and why the number doesn't even really propose to show that.
There's also like 7 or 8 other inflation numbers as well that show different sectors or measurements.
Then again I just realized this is a gambling sub and not economics or bonds so folks here would rather bet on sentiment versus economic or financial fact.
BTW, the actual point of conservative governance is reducing institutional trust while removing community organizations that allow mutual aid and free association to develop. You are doing exactly what they want you to do.
I actually did read and understand inflation numbers a lot more than I should. Yes, there are other guages of inflation. The numbers I see are for the other gauges of inflation is double to triple what is being reported for CPI.
To address your point regarding reducing institutional trust, that may be the case for other points of data. But for CPI, the manipulation is purely to manipulate the markets to this administration's favor.
Just look at the gas price shock that occurred under Biden. The CPI numbers for what was reported then is drastically different than what is being reported now. Plus, the economic conditions are much worse now than it was then.
I’d say it’s more accurate to say they are a hedge against currency debasement, they tend to move more closely with real rates than inflation projections. Not to say these are unrelated but I don’t see much upside until the rate hiking cycle stops.
Why would you buy bonds when inflation is ripping and showing no signs of cooling? Why would you buy bonds now when yield will be higher after the next rate hike?
Also if for some reason you think the Trump administration is going to get their act together and focus on knocking inflation out. If you believe that I’ve got a bridge in NY to sell you.
Bingo. TIPS are only inflation protected and lock in purchasing power if CPI is accurate.
I don’t know about anyone else but my purchasing power is down a lot more than the reported inflation. So even with TIPS you are basically locking in lower purchasing power.
I won’t touch bonds with this admin. Tips or otherwise.
CPI isn't a measure of your personal inflation rate. It's a broad generic measure for the entire country. Generally speaking it tends to overstate inflation for old and rich homeowners and understates it for younger and poorer workers living in high cost areas.
Because the stock market is comprised of absolute dog shit right now. Anthropic and OpenAI don't have viable business models. AI stocks and Nvidia make up 30% of the SP500 right now and they are all each others biggest customers. I've seen this movie before, it happened right about March in 2000.
It's wild to me that more people aren't sounding the bell that our entire economy is propped up by 5 companies just handing the same pile of money back and forth.
It's lunacy. When OpenAI and Claude have to go public or fold it's going to get real for Nvidia's earnings. Oracle's stock tanked and their credit has been downgraded to slightly above junk rating.
You can buy other things than just the S&P 500. Hell, even just buying the equal weight S&P 500 index will do just fine if your goal is to avoid overindexing to the AI stuff.
Gold doesn't trade the way the gold bugs say it does. Gold trades inversely to the UST10. If rates are going up, then your gold is going down. Gold will reverse and go higher when the Fed lowers rates and will really blow out if the Fed does that when inflation is not tamed. BTW, it's the same with things like Crypto too.
Over reaction and algo trading almost guaranteed. The fundamentals for gold has only strengthened. It does this every time CPI, PCE or PPI comes out slightly hot. Watch it move in real time as the bots trade it, then rebounds as buyers catch the dip.
Precious metals will go down when the US10 and others go up unless the Fed rates get to a point where the buyers have lost confidence in the bonds and decide they actually need a hedge against the USD. The market demanding higher and higher rates is a signal that they are only willing to buy those bonds at a higher return. This can be for a few different reasons. The red flashing signal for precious metals will be when buyers actually stop buying US treasuries.
Have you been to a GameStop recently? I can’t anymore because the nearest location to me recently shutdown, but the last time I was there it was looking pretty dire
I bought my house from a guy that got tangled up with GameStop stock and lost everything and was facing foreclosure. Sounds like you know what you’re doing though, best of luck to you.
It has pumped and dumped twice now. The dumping part was foul play. The status as a meme stock is still stuck.
Ryan Cohen is against a squeeze and dump, and has performed a business turnaround for the history books. The business can support higher valuations now.
Edit: thanks for the chat and well wishes mate. Best of luck to you too. Consider GME as my well wishes, could make some money. Insiders buying as of yesterday at these prices. We’re at the floor still.
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u/calmdownmyguy 12h ago
It's a lot higher than that. The government released the lowest number they thought enough people would believe