The Fed has just issued a statement that they have just injected an additional $55 billion into the global financial system. They are "flooding the world with money", according to Steve Liesman, Senior Economics Reporter at CBNC.
Crude oil is up nearly $10 in the past two days. Inventory reports by the US government yesterday morning showed significant draw-downs.
Ultimately, the creation of vast amounts of new money, while the economy is contracting, is inflationary. Funds that are seeking to preserve their capital are once again buying commodities, and especially gold. The money must go somewhere, and the money is likely to go to hard assets. That mean higher inflation in the 6-9 month time frame.
Crude oil is up nearly $10 in the past two days. Inventory reports by the US government yesterday morning showed significant draw-downs.
Ultimately, the creation of vast amounts of new money, while the economy is contracting, is inflationary. Funds that are seeking to preserve their capital are once again buying commodities, and especially gold. The money must go somewhere, and the money is likely to go to hard assets. That mean higher inflation in the 6-9 month time frame.
Inflation must go higher. It's guaranteed!
