“On Tuesday, [Fed Chairman Jerome Powell] backed away from the phrase [“transitory”], which he said had become unnecessarily confusing…If you’re confused, you’re not alone.”— John Karow, Scottsdale Bullion & Coin Precious Metals Advisor
This week, Federal Reserve Chairman Jerome Powell backed away from using the phrase “transitory” to describe the nature of inflation in the country. As we’ve talked about in previous videos, all year we have found this term to be confusing, misleading, and perhaps even a direct lie.
Now we see Powell trying to backtrack, revealing the true nature of what’s going on: the current inflationary trends are not “of brief duration” as the Fed would like us to believe, but a symptom of a much deeper and more systemic problem in American banking.
The truth is that the dollar is backed by nothing except confidence in the government. And with a government that tells half-truths, how confident are we, really?
If you’re confused by Powell’s messaging, you’re not alone. Watch the video to learn what’s really going on from Scottsdale Bullion & Coin Advisors Eric Sepanek and John Karow.
Why Has the Fed’s Language Been Unnecessarily Confusing?
Why would the Fed use a word like “transitory” in the first place, when it’s been clear all year that inflation is on the rise? Isn’t it a fact that inflation hit a three-decade high last month? Why would Powell need to explain his language if he weren’t trying to obfuscate the truth?
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Saying inflation is “transitory” doesn’t make sense. We think he’s known it all along, but he has been trying to assuage the American public into believing that things aren’t really as bad as they are.
Just look at the price of gas and food. We can all feel the hit to our wallets as the cost of these essential goods has gone up over the course of 2021. (And these metrics are not even included in the official inflation numbers.)
Why is Powell now making language changes in the middle of a crisis? We think it’s because there’s no longer any way to deny the massive inflationary pressures that are ravaging the market.
The truth is that the dollar is unstable, and if it weren’t being regulated by the central banks, our entire currency system would collapse.
Don’t Wait to Buy Gold—Buy Gold and Wait!
When people ask, “Why hasn’t gold gone up more now?” there are a few things we want the public to understand.
First, the central banks control the prices of the dollar and therefore of gold. The dollar has nothing backing it except confidence, and if the price of gold were allowed to truly soar, it would easily show the weakness of the greenback. Of course, the Fed doesn’t want that, so gold prices are artificially manipulated to some degree by bullion banks.
Second, gold is slow money. Gold is a long-term investment. Gold provides physical security against the whims of an unstable market. Fifteen years ago, we had clients exclaiming that buying gold at $500/oz. seemed crazy. Now, gold is holding around $1,800/oz. They key to owning gold is to buy gold and then wait for the inevitable price increases over time.
But don’t wait to buy gold! Buy gold before the eventual market forces send gold higher. Learn how to protect yourself now from rising inflation with this free guide.