Jerome Powell, New Fed Chair

The appointment of Jerome Powell as new Fed chair is likely the catalyst that ushers in a multi-decade era of rising inflation and soaring gold stocks.

I’ve announced a long term target for GDX of $15,000. That really  isn’t very high… given the strong inflation numbers that I am projecting for America in the years ahead.

Having said that, Powell has only been on the job for one day. Investors need to show patience. Wait to see what he actually does before taking “back up the truck” market actions.

Powell’s first significant actions are likely to be announced at the March 21 Fed meeting. I expect a firm commitment to more rate hikes and more quantitative tightening.

That’s inflationary because it boosts bank profit margins and they become more willing to take lending risk. That produces a rise in the velocity of money. 

As the cost of borrowing rises, companies will raise prices and workers will demand higher wages. If Powell also makes a firm commitment to deregulating America’s thousands of small banks on or before March 21, inflation would accelerate even more rapidly.

It’s my contention that wage inflation of 20%+ is not just theoretically possibly, but morally justified. Here’s why:

For many years, global governments have colluded with central banks to run socialist/fascist QE programs. These programs moved money from workers and savers to government bonds and stock markets. Additional money was simply printed and taken.

QT, higher rates, and small bank deregulation are beginning to re-empower Main Street. This is happening while “Government Street” (the bond market and the dollar) and Wall Street risk disintegrating. 

Double-click to enlarge this exciting bond market chart.  

A head and shoulders top pattern is in play. The neckline has been crushed.

Around the world, governments are announcing import duties. That’s inflationary. If India’s government had cut the gold import duty, it would have increased demand, but the duty itself is also inflationary.

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