Commodities are booming. A lot of people seem to think this is a sign of pending economic growth. But in actuality it’s really a sign of inflation. Most of the investment world continues to focus on the stock market and they’re not really paying attention to what going on in the commodities markets.
What people should be focusing on is the Commodities market because that’s going to have a big impact on what happens in the supermarket.
Agricultural commodities, in particular, are on fire. We’re seeing five-year highs on many commodities. Corn was up 5% on Wednesday (Jan. 13). Wheat was up 4.73%. Oats and rice were up over 2%.
It’s not just agricultural commodities charting big price increases. Industrial metals are also up. Copper was up 2.13% on Wednesday and hit a 5-year high.
In fact, the money supply grew at record levels in 2020. Historically, the growth in the money supply has never been higher with the 1970s being the only period that comes close.
The Federal Reserve is printing money to monetize the record US budget deficits. And it’s also expanding the money supply in order to keep interest rates from rising.
While yields on US Treasury bonds remain relatively low, interest rates have spiked significantly from their lows last spring and the trend is clearly up. This stands to reason given the huge numbers of bonds the US Treasury is issuing to fund the borrowing and spending.
It’s not impossible that we could easily see the yield on the 30-year Treasury quickly move from 2% to 4%. That would be a large move, but 4% remains low in historic terms.
So, why aren’t we seeing a big rise in the price of gold and silver? It’s because investors believe the Fed will ultimately fight inflation and rising interest rates will be bad for precious metals.
Of course, that’s not going to happen. The rising stock market also makes investors less inclined to hedge their portfolios with gold and silver.
If you need more evidence on where inflation is picking up than look no further than the oil price. Oil is now over $53 a barrel. Oil prices are not going to stop going up.
And again, it is not economic growth that is driving this oil train. It is inflation.
It is money supply growth. It is the Fed and other central banks that are debasing fiat currencies.
And so you need more currency to buy oil, or to buy copper, or to buy wheat. Any of these commodity prices that are going up — it’s a reflection of the value of paper money going down.
We are now officially heading for an inflationary disaster and It’s going to be a death spiral of inflation where the more inflation we get the more inflation the Fed is forced to create.
So what does all this mean? It’s time to strategically stock up on all the food items you need. Don’t take for granite this window of time to Get Your Food Game Up along with you Weight.
It’s only so long the media will be able to ignore the financial pinch on the household budget to afford food and other life necessities. Once this subject becomes a headline story then we will definitely see a mad dash to grocery stores like March of last year.
The only difference this time is that there may not be a restocking of shelves as fast to meet demand.
Every paycheck in 2021 needs to be strategically allocated not just for the short term but as if it may be your last. Cut back on the non-essentials and focus on creating your reserves.
Just some more food for thought that you will not hear on Fox or CNN just yet.
Share your thoughts in the comment section below and let us know how you are strategizing differently in the upcoming days?
Article originally appeared here…
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