Stagflation is a Looming Economic Risk. Here’s What it May Mean for Your Money.
While the economy is still in a “strong position,” the risks that unemployment and inflation will rise have gone up, the Federal Reserve said last week.
by Lorie Konish
CNBC.com
The U.S. economy is still in a “strong position” despite “heightened uncertainty,” according to the Federal Reserve’s latest assessment.
Yet there’s a looming economic risk the U.S. hasn’t meaningfully faced for decades — stagflation.
“The risks of higher unemployment and higher inflation appear to have risen,” Federal Reserve Chairman Jerome Powell said on May 7.
Those two factors — along with slower economic growth — are the definition of stagflation.
So… Now What?
by James Hickman
Schiff Sovereign
One of the most mysterious villains in the history of cinema was the fictitious character ‘Keyser Söze’ from the movie The Usual Suspects.
No spoilers here, but there’s a scene where they describe his rise in the criminal underworld. According to the story, Keyser Söze realized that “to be in power, you didn’t need guns or money or even numbers. You just needed the will to do what the other guy wouldn’t.”
I’ve written before that there may have been some grand strategy behind “Liberation Day”.
Perhaps the past several weeks were part of a deliberate effort by Donald Trump to prove that he has the will to do what nobody else (including China) would do… namely, cause a major worldwide recession that would even hurt his own country.
Central Banks, De-Dollarization, and the Bull Market in Gold
by Money Metals
GoldSeek
In this episode of the Money Metals podcast, host Mike Maharrey chats with Dr. Nomi Prins in an engaging interview.
Dr. Nomi Prins kicked off the discussion by framing today’s gold rally as just the beginning of a much larger trend. She forecasted gold reaching $3,000 by the end of 2024, $4,000 in 2025, and $5,000 by 2026.
These numbers aren’t arbitrary—they’re driven by structural forces reshaping global finance. Gold’s momentum is fueled by central bank accumulation, rising distrust of fiat currency, and growing economic and geopolitical instability.
Look at What is Happening with Silver and the U.S. Dollar
from King World News
Here is a look at what is happening with silver and the US dollar.
May 13 (King World News) – James Turk: No winner yet as silver’s coiled spring tightens. Will manipulators force silver lower like last time (blue oval), or will silver finally break out & head to $50 as its 1st stop on the way to the moon as US dollar purchasing power erodes from inflation and other ills? We’ll soon see.
[…] Citi: Room For Tactical Dollar Rally
Naveen Nair at Citi: There could be further room for a tactical uptick in DXY even after the rally overnight. The signal we had flagged two weeks ago (the crossover in weekly momentum) suggests we could see ~103 in DXY at the minimum, while a move towards the 200d MA at 104.27 is also on the cards.
Collapse is Imminent, Gold, Silver, Geopolitics, Financial Markets, | Alasdair MacLeod
Alasdair MacLeod on Triangle Investor warns of an imminent economic collapse driven by a credit bubble and distrust in the dollar.
by PR
Jerusalem Post
In an interview on the Triangle Investor uploaded by the YouTube channel Triangle Investor, veteran financial expert Alasdair Macleod delivered a sobering outlook on the global economy. Macleod, Head of Research for GoldMoney and a figure with over four decades of experience in the intricate world of finance, painted a picture of an impending economic crisis fueled by a massive credit bubble, geopolitical instability, and a growing distrust in the U.S. dollar.
Macleod, who began his distinguished career in 1970, didn’t mince words, asserting that the current financial landscape is teetering on the brink. “What people don’t understand, Lucien,” he stated early in the interview, “is that we’re in a credit bubble… and if you don’t understand that we’re in a credit bubble, you will understand, I am sure, that we’re in a debt bubble. And credit is just the other side of debt.” This foundational argument sets the stage for his analysis of the interconnected threats facing the global financial system.
What Will Happen to the Global Market if the U.S. Dollar Hegemony Declines?
HSBC believes that if the United States attempts to “reclaim” control over the dollar, meaning the Federal Reserve is no longer willing or able to continue acting as the world’s “lender of last resort,” and global capital markets lose dollar swap lines, the risk will be a massive shift in the market towards gold, which has completely inelastic supply, leading to severe liquidity shortages. While gold prices continue to soar, this could trigger financial turmoil similar to that of the 1930s or 1970s
from Long Port App
According to news from the Wind Trading Platform, on May 8, HSBC’s senior economic advisor Stephen King released a report that examines the rise and fall of reserve currencies from a historical perspective, delving into the status of the US dollar as the world’s reserve currency, and studying and analyzing the Trump administration’s attitude towards the dollar’s reserve status and its potential impacts.
The report shows that history indicates that “destroying a reserve currency is easier than creating one,” and the collapse of the reserve currency system is often accompanied by significant economic turmoil and sharp fluctuations in asset prices, rather than a smooth transition to a new system.
King pointed out that certain members of the Trump administration are concerned about the burden that the dollar’s current reserve currency status places on the US economy and are attempting to weaken the dollar’s international standing through various measures.
Is Stagflation Here? Business is Losing Faith in Trump
by Justin H. Vassallo
UnHerd
As Donald Trump hit the 100-day mark of his second presidency, news of a first quarter economic contraction seemed to confirm most voters’ fears about his tariff gambit. At 0.3%, it was smaller than the first quarter contraction of 2022, the sole dip of former President Joe Biden’s term, when pandemic stimulus policies were winding down and inflation was peaking. Yet the impact of April’s market sell-off, pauses on inventory orders and investment, ebbing international trade flows, and the 145% tariff rate on China has yet to fully reverberate through the economy. Absent a radical reversal in Trump’s trade posture, mainstream economists warn, stagflation — a combination of high inflation, stagnant or falling output, and rising unemployment — is imminent.
Trump has been unfazed by such warnings, glibly stating that children will “maybe” have fewer “dolls” than they used to. And for those who believe Trump is playing four-dimensional chess, fundamentally shifting the makeup of the American economy, decoupling from China, and reducing the overall trade deficit — all this is worth the pain. This, even as few of these cheerleaders have indications of what it is that Trump wants America to produce more of, and fewer still have realistic estimates of how long it will take to achieve all these ends.
George W. Bush Lit the Dollar Fire On Which Trump Throws a Match
by John Tamny
Forbes
Presidents get the dollar they want, and George W. Bush wanted a weaker one. Bush’s departure from the Reagan/Clinton era of a largely strong, stable dollar as a measure of constant objective value was one of his worst policy decisions, and it’s one that no president subsequent to Bush has chosen to reverse.
When Bush entered the White House in January of 2001, a dollar was worth 1/260th of a gold ounce. When he exited in January of 2009, a dollar purchased 1/874th of a gold ounce.
To be clear, gold itself doesn’t move as much as the currencies in which it’s measured do. Gold’s constancy explains why it’s long been used to define money. Against the dollar, gold rose over 230 percent during Bush’s presidency.
Key Takeaways From the Fed’s Latest Decision to Hold Rates Steady as it Warns of Stagflation
by Bryan Mena, CNN
AOL
The central bank kept its benchmark lending rate unchanged at a range of 4.25% to 4.5%, extending a holding pattern that began in January.
Officials have said it’s best to wait on the sidelines for data to show how the US economy is responding to Trump’s significant policy changes, though the Fed said in its latest policy statement that the “risks of higher unemployment and higher inflation have risen” — a toxic duo known as stagflation.
Fed Chair Jerome Powell in a news conference said that uncertainty is pervasive, from where policy is headed to how the economy will evolve in the face of Trump’s ongoing trade spat with the world. He also reiterated the growing threat of stagflation, but said America’s labor market remains a reassuring bright spot in the economy.
Trump Claims Prices Are Down. Here’s What the Data Actually Shows.
While prices for certain goods have declined, inflation remained elevated even before tariffs show up in the data.
by Andrew Ackerman and Rachel Lerman
Washington Post
President Donald Trump has insisted that prices are falling, even as consumers continually express concern about the economy. He has repeatedly attacked Federal Reserve Chair Jerome H. Powell for not lowering interest rates to offset the effects of his trade war. At the same time, he has dismissed concerns about inflation, claiming that “costs are down” and that there is “virtually NO INFLATION.”
The reality is complicated. Though inflation was cooling before Trump’s tariffs kicked in last month, data the government collects on the economy has not captured the effects of the tariffs yet and is unlikely to do so until this summer. And while prices for some goods such as oil and gas have come down — as Trump has repeatedly noted — economists say those data points overlook broader trends.
Here’s what to know about inflation and prices for common goods.