John Rubino – Inflation, Fed Policy, Housing Market, US Dollar Vs Euro, German Bailouts, Precious Metals, And Nuclear Power
John Rubino, Founder of The Dollar Collapse website, joins us wide-ranging discussion on the health of the global economy, Fed policy, the housing market, the strong US dollar, the weak Euro and European economy, precious metals, and how nuclear power can assist the global energy crisis. We start off reviewing the higher than expected CPI inflation reading and the market expectations for further hikes and what this may mean for sectors like the real estate market. This leads into outlining the strong consumer demand thus far, but how that may be limited moving forward as people are maxing out credit and available savings.
Next we pivot into the persistently strong US dollar, and how strange it is to see it paired with the high inflation, but it is more a counterbalance to the very weak Euro and Yen. With the energy crisis in Europe starting to impact industry, the coming business bailouts in Germany are not instilling confidence in the Eurozone at present. Japan is perpetually weak due to the mounting national debt to backstop their markets, and their challenges with an aging population. The strong dollar has been a wrecking ball in the commodities sector for several months now, and it has impacted gold and silver, but John sees value in the very depressed mining stocks at this time.
We wrap up with potential paths forward and investing opportunities in the energy space, and in particular John feels that nuclear power is becoming the more obvious solution to energy production, with the backdrop of higher oil and nat gas prices, and renewable energy not producing the base lode power necessary to sustain global demand. As a result, uranium stocks should benefit from the eventual rise in the demand for nuclear and coming higher uranium prices needed to incentivize new production to come online.
Peter Schiff: ECB Inflation Fight Bad News For The Fed
SchiffGold.com – Wednesday, SEP 14, 2022
“The European Central Bank (ECB) raised interest rates another 75 basis points last week. In his podcast, Peter Schiff explained how the ECB inflation fight could create big problems for the Federal Reserve and the US dollar.”
“The 75-basis point rate hike was a huge ECB standards, but it’s still basically spitting into the ocean when it comes to battling eurozone inflation. European inflation is worse than US inflation. The official CPI came in at a record 9.1% in August. This rate hike brings the eurozone interest rate to 1.25%. Given that it was below zero at the beginning of the year, the ECB is taking a pretty aggressive stance. But even with the hiking, the real interest rate is still -7.85%. That’s not going to slay 9.1% inflation.”
“Euro weakness has contributed to the high eurozone CPI. The euro traded below parity with the dollar for a good part of last week until a small rally after the ECB announcement. Peter said euro weakness is also one of the reasons US inflation isn’t even higher.”
Services Inflation Spikes, Core CPI Jumps, Food Inflation Worst since 1979, Durable Goods Rise, but Gasoline & Airfares Plunge
by Wolf Richter • Wolf Street – Sep 13, 2022
“Gasoline prices plunged, but food prices jumped, prices of durable goods rose again, “core CPI,” which excludes food and energy, jumped, and prices of services spiked relentlessly as inflation has shifted from supply-chain issues and commodities to services. This process of inflation muscling into services started a year ago and has been getting worse every month for the 12th month in a row, a clear sign that inflation has gotten solidly entrenched, and is getting worse in vast parts of the economy, and that the Fed will have a hard time dislodging it.”
I’m sure glad I’ve been diversified into the Uranium stocks the last 2 years, as they’ve had fantastic moves, and likely have a whole lot more where that came from if nuclear power keeps gaining traction with previous haters that have seen the light.
I agree with John’s points that we’ll see Uranium prices head higher with longer-term off-take contracts pulling prices up to where it incentivizes production.
There were some good comments from John in todays editorial interview, where he veered into the bullish picture for Nuclear power and related Uranium stocks. TG Watkins also mentioned Nuclear & Uranium in his interview this week. That is interesting to me as a longer-term bull on the sector, as those are 2 guys we have on regularly that haven’t talked about nuclear or uranium previously, so the awareness is growing.
Nuclear power has been a bit of a pariah for the last decade, but more and more nations and even the militant greenies are starting to understand it is crucial for the world energy mix, and the events of the last 2 years and the ensuing global energy crisis has just underscored that point even more.
Here is a candleglance #chart of a dozen widely followed #Uranium stock names, showing the action over the last 2 months. Quite a nice little rally to passed many resource investors by since they were not in position, but there is plenty more where this came from.
U.S. DOE Sets Stage for SMRs to Replace Former Coal Plants – Uranium Market Minute – Episode 181:
Uranium Insider w/ Justin Huhn – Sep 13, 2022
The total food inflation may become a deciding factor driving inflation for years….. hope that farmers generally do not take covid jabs…or else we got bigger problems than just inflation of food costs…..
Denmark just banned the jabs for almost everyone under 50. Better late than never? More like too little too late and only due to political pressure.
King Charles needs to slam Biden for disastrous withdrawal from Afghanistan that left the Brits pissing in the wind.
1 funeral deserves another….
Charles knows he better keep his mouth shut or the flood gates will open with stories about him and his family.
Gotta start somewhere?
“Yesterday’s CPI Showed Why Nearly All People Who Pretend They Know What Is Going On Really Have
By Michael Every of Rabobank – Wednesday, SEP 14, 2022
“Yesterday’s US CPI report was one of those market-moving blockbusters that underline why nearly all the people who like to pretend they know what is going on really have no clue. I include myself in that group too for having been swept away by the trend expecting a weak inflation number for August on the back of lower gasoline prices – though in my defense I have been warning “not transitory” for over a year, and yesterday specifically flagged that US CPI was only going back to 2% again in magical DSGE models, not real life…”