The Phaserl


New CPI Numbers Reveal Investment Window for Gold

by Samuel Bryan, Schiff Gold:

The Bureau of Labor released its Consumer Price Index report last Friday, which showed an increase in all consumer items by 0.2 %. The CPI measures the change in price Americans pay for all goods and services. According to the Wall Street Journal, the latest numbers indicate that the “effects of low energy prices and a strong dollar are fading.”

In short, prices are continuing to rise because of the ultra-low interest rates and quantitative easing. This is not only bad news for consumers, it’s worse news for the nation’s economy in general. That’s because the reported CPI is only a small peek into the actual effects of the Fed’s monetary policies. As Peter Schiff has said many times:

“The methodology for computing the CPI has deliberately been designed to hide the effects inflation has on consumer prices.”

What’s hidden within the government-created CPI reports is the fact that most Americans are feeling the pinch. Gas price stabilization is also beginning to affect the overall increase.

Even though inflationary pressures might prompt the Fed to raise interest rates, the chances are good they still won’t. Raising rates means US debt becomes even more impossible to pay off as more and more borrowing is needed to service debt interest. The Fed has gotten itself into a quandary by keeping interest rates artificially low. Such a cycle of borrowing to pay debt will inevitably end in default and devaluation of the dollar, the world’s currency standard.

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