Craig Hemke – Inflation Is Still Running Hot; Transitory It Is Not

Shad Marquitz
December 10, 2021

Craig Hemke, Founder and Editor of TF Metals Report, joins us to discuss the recent hot Consumer Price Index inflation reading at 6.8%, the highest level since 1982, and the odd market reactions to this data.  We discuss how the higher inflation reading was met with even more bond buying driving interest rates lower and creating even more negative real rate, and yet the precious metals sector barely moved higher in this environment.  Craig unpacks other periods of history with negative real rates, and contrasts how markets reacted in response to a similar macroeconomic backdrop. We wrap up with some thoughts on the forward-looking markets trying anticipate a potential acceleration in Fed QE tapering or the eventual rate hikes in 2022, and some potential geopolitical turbulence to navigate.  

Click here to visit Craig’s site – TF Metals Report.

    Dec 10, 2021 10:54 PM

    The Upside Down Year in Gold and Silver – Eric Sprott’s Yearly Wrap Up
    Sprott Money – w/ Craig Hemke – December 10, 2021

    “What a great way to close our 2021 Monthly Wrap Up series with a special Yearly Wrap Up courtesy of Eric Sprott. After a frustrating year where many things that would typically send precious metals higher had the opposite effect, what should an investor do? Host Craig Hemke sits down with special guest Eric Sprott to break down all the gold and silver news you need to navigate an upside down market.”

    > In this edition of The Yearly Wrap-Up, you’ll hear:

    – Why gold is down YTD even as real rates are the lowest in history
    – Words of advice for new stackers
    – Plus: where we go from here

      Dec 10, 2021 10:11 PM

      “I just want to lead off with: look, I’m a skeptic, OK? And when I look back at my involvement in the financial markets, I very much foresaw the NASDAQ crash in 2000. The ’07-’08 housing/financial crisis didn’t escape me. And of course, it brings me to precious metals, the fact that you’re a skeptic about all the things that we’re seeing going on here. And even in that same vein, when you talk about inflation—it was reported at 0.8% this last month; that’s annualized 9.6; if you actually want to compound it, it’s like 10—and I don’t believe the number… I don’t believe the number is that low.”
      — Eric Sprott (12/10/2021)

    Dec 10, 2021 10:14 PM

    S&P 500 Hits Record, Shrugs Off Hottest Pace of Inflation Since 1982
    By Yasin Ebrahim – – (12/10/2021)
    “The S&P 500 closed at a record Friday, shrugging off the the fastest pace of inflation in 39 years as investors continued to pile into tech stocks as U.S. Treasury yields fell. ”

    “CPI rose 0.8% in November, a tenth of a percentage point more than expected, though the year-on-year consumer prices jumped 6.8%, in-line with expectations and the fastest rate since June 1982.”

    “People were expecting a very high number and they got it […] that’s why there’s a muted market reaction to this inflation report,” Chief Investment Officer of Opportunistic All Cap Equity Strategy at Spouting Rock Asset Rhys Williams told in an interview on Friday.

      Dec 10, 2021 10:16 PM

      All Eyes on CPI as Inflation Worries Take Center Stage
      By James “Rev Shark” Deporre – Dec 10, 2021

        Dec 10, 2021 10:20 PM

        CPI report released: Consumer prices jumped 6.8% in November, the fastest inflation spike since 1982

        Paul Davidson – USA Today – December 10, 2021
        “The consumer price index jumped 6.8% from a year earlier, the fastest pace since 1982, as prices surged for staples such as food and gasoline, new and used cars, rent and physicians’ services, among other items, the Labor Department said Friday. That’s up from 6.2%, which was a three-decade high, in October.”

        “Last month, prices rose 6.4% annually for groceries, with jumps of 13.9% for beef, 16.8% for pork, 8.4% for chicken and 8% for fish. Gasoline prices soared 58.1% over the past year, rising 6.1% monthly in November.”

        “Used car and truck prices shot up 31.4% from a year ago and new vehicle costs climbed 11.1% as the industry continues to grapple with a chip shortage that’s curtailing new vehicle production.”

        “Although wages are also climbing as a result of the worker shortages, they’re not keeping pace with the soaring prices, squeezing lower-income households.”

          Dec 10, 2021 10:24 PM

          New Inflation Data Give the Fed Room to Focus on Employment
          By Alex Williams – Barron’s – Dec. 10, 2021
          “After a series of month-over-month readings this fall that have suggested an accelerating pace of inflation to some commentators and policymakers, the December print matched expectations. Despite inflation broadening beyond problem sectors like used cars, the early bond market reaction to today’s CPI print suggests that markets are expecting the Federal Reserve to react marginally slower to inflationary pressures.”

          “This is good news for a Fed that has come under increasing pressure to hike rates against elevated inflation. The strength and speed of the recovery, especially relative to past recessions, has made it difficult for some to come to grips with the features that would distinguish “transitory” from “persistent” inflation, with calls for hikes reminiscent of 2015 Fed policy. In light of that ambiguity, Fed Chair Jay Powell has moved away from the term “transitory” in recent press conferences, preferring instead to emphasize the new “broad-based” nature of inflation.”

          “Despite the hubbub about tapering asset purchases, the Fed has provided clear forward guidance on the path of interest-rate policy: Rates will not rise until inflation is above target and labor markets have recovered to the Fed’s goals for near-term maximum employment. If you haven’t been closely watching the Fed throughout the pandemic, this might be surprising. Most assume central banks to be concerned only with restraining inflation, not promoting employment. But the choice of double conditionality reflects the lessons learned from the slow recovery and implementation of the Evans Rule during the Great Recession. The levels of specific indicators that the Fed considers consistent with maximum employment, however, are still a bit of a mystery.”

    Dec 10, 2021 10:18 PM

    The Fed is starting to look a lot like Dr Faucci. Fools that cannot extract one hand from the punch bowl and the other from the cookie jar

    Dec 11, 2021 11:34 PM

    infaltion is here ——- but we must invest in stocks or real eastate there is nothing else that works i bought 20 half oz gold coins 14 years ago and now i am not much ahead . if i had bought PEP OR CAG i would be much better off. I am now investing more and more in food and soda pop stocks and doing better. Trump worship is messing with peoples sanity and causing hard split in GOP I thin LIZ Chaney will look better than TRUMP and his flunkys in 4 years . love and good health to you all rsh