The U.S. Desperately Needs Inflation And You Need Gold

NEWS SUMMARY: Precious metal prices shot up 2% Thursday as expanding Fed stimulus weakened the dollar. U.S. stocks rose as investors cheered the latest Fed efforts to support the economy and financial markets.

HABER-FORBES---The United States fiscal and monetary worlds have entered a paradigm shift. Hard money, the Gold standard, fiscal austerity, the Federal Reserve as liquidity provider at a penalty rate with strong collateral: all of these are now squarely in the rear-view mirror. We have further moved on from ZIRP (Zero Interest rate policy), past Quantitative Easing (QE - AKA money printing), and have entered the world of Modern Monetary Theory (MMT). What is MMT? The federal government, through the Federal Reserve, prints as much money as politicians need for whatever purpose, and when you get inflation you tax the rich to slow it down....For years, prognosticators and politicians looking at the ballooning debt and deficits thought we could grow or tax our way out of trouble. Not anymore: The only way out of our ballooning fiscal crisis is to engender some inflation....We came into this virus war with $23T of federal debt and we will probably exit the fiscal 2020 year at close to $30T...The effects of this recession will lay bare these problems and only one solution: Make a trillion seem like a $100 bn through inflation....If the Fed wants more inflation, I want more gold. Our portfolios have had 5-10% for a while now and we are moving up to 15% - but 20% is not out of the realm of possibilities. I want it before the inflation arrives. The great hockey player Wayne Gretsky said 'skate to where the puck is going to be, not where it has been'. Gold will be where the money supply (m2) and inflation will take it....The CEO of Canadian gold miner Novagold recently said; 'What we've seen in the gold industry is that gold production has effectively peaked'. We have a good shot at new highs soon, after which we will go as far as the Fed is willing to take us. Prepare for the new paradigm."