Category: Inflation
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Do Tariffs Cause Inflation?
Many media sources report that Trump’s tariff policy will cause inflation. Will it? On July 15, the government announced that the CPI for June 2025 rose by 0.3% for the month. The next day, the PPI for June was reported to have been unchanged on the month. The press reported…
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Should Gold Be in Your Portfolio?
Many well-respected investors and finance writers—from Warren Buffett to Burton Malkiel (author of Random Walk Down Wall Street)—do not believe that investors should own gold as part of their investment portfolios. However, many other investors and commentators argue that gold does belong in most portfolios. Who’s right? In this post,…
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Money and the Making of America: The Secret Second Revolution
Happy (almost) Independence Day! We all know the Fourth of July as the date upon which the Founders signed the Declaration of Independence, the official beginning of the United States of America.[1] History books emphasize the surprising fact that a ragtag band of British colonies gained independence from the British…
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Inflation Protection? Or Trap?
With inflation remaining “stubbornly high”[1] we today take a look at the usefulness, or lack thereof, of TIPS. Please don’t buy TIPS without reading this. TIPS stands for Treasury Inflation-Protected Bonds. The US Treasury describes TIPS thus (we added the “bold” fond for emphasis): Treasury Inflation-Protected Securities (TIPS) are marketable…
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Does This Terrify You?
Does it terrify you that this man has the President’s ear in economic matters? Here is a video of President Biden’s Chairman of the Council of Economic Advisors trying to explain, well, you use your own judgment. I’m not sure what he’s trying to explain. Does it terrify you that…
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The Hidden Risk: Interest Rates and Inflation
This month, the Fed decided not to raise interest rates, and traders responded by driving the Dow Jones Industrial Average to an all-time record.[1] Why? Apparently, the market believes that the next Fed move will be to decrease interest rates, presumably because the Fed believes it has beaten inflation. “Inflation…
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Does The Debt Crisis Mean Inflation?
A debt crisis is building in the US, and there is nothing that can be done to stop it. However, there are alternatives for dealing with it. We explain the alternatives, and why we think inflation, over the medium to long run, is almost guaranteed. The Oxford English Dictionary defines crisis as…
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US Debt Downgraded! Does It Matter?
At the end of July, 2023, the financial rating agency Fitch announced that it was downgrading the sovereign debt of the United States. The stock market tumbled. The bond market tumbled. Talking heads talked. But what does the downgrade really mean? “Sovereign Debt Cannot Default”In the aftermath of the Fitch announcement, many pundits…
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Inflation and Independence (or, Was Congress Always THIS Irresponsible?)
7/4/23 Happy Independence Day! Here’s a fun pop quiz for your Fourth of July BBQ: Who was the first American economist to warn about the dangers of inflation? You may not have heard this name before, but it was Pelatiah Webster, who – in a series of essays, some of…
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Will Treasury Inflation-Protected Securities protect you from inflation?
Treasury Inflation-Protected Securities are widely advertised as an effective hedge against inflation. But are they? There are a number of reasons the answer may be “no.” CPI may not reflect the inflation you face The principal of TIPS bonds is adjusted by the CPI. For example, if you buy a…