Inflation: Two (Real) Reasons it’s Going a Lot Higher

By Wednesday, June 24, 2015

InflationIn the first five months of the year, data from the Bureau of Labor Statistics (BLS) says that the U.S. economy had inflation of just 0.2%—that’s two-tenths of one percent. (Source: Bureau of Labor Statistics, last accessed June 18, 2015.)But let me ask you; when is the last time you paid less for something when shopping?Fruit prices are rising. For example, Fuji apples have increased in price by. Read More

Inflation Data Suggests Gold is Severely Undervalued

By Tuesday, June 23, 2015

GoldInflation drives gold prices higher. If the general level of prices increases, the yellow metal rises. It’s that simple.Look at the chart below. It plots the price of gold (golden line) and the Consumer Price Index (CPI) (black line), the official measure of inflation.You will notice a disparity; until 2013 the CPI and gold were moving in line, then everything fell apart.Why? Investors bought into the idea. Read More

U.S. Economic Outlook for 2015: Economy Strong but Markets Unstable

By Friday, June 19, 2015

Economic Picture for 2015 Not RosyStrong Economic Data Points to Growth in 2015?As 2014 winds down, many investors are wondering what the economic outlook for 2015 will be. If you look at the U.S. economic data that’s been trickling in, 2015 looks like it could be a very strong year.The U.S. announced strong third-quarter gross domestic product (GDP) growth of 3.9%. This extends the recent trend of strong quarter-over-quarter GDP growth; in the. Read More

Why Inflation More Likely Than Deflation in the U.S. Economy

By Monday, June 8, 2015

Deflation in U.S. EconomyIn the first four months of this year, January to April, prices in the U.S. declined by 0.2%. But this shouldn’t be a reason to jump to the conclusion that deflation will prevail for the U.S. economy. (Source: Bureau of Labor Statistics, last accessed May 31, 2015.)Probability of Deflation in the U.S.: ZeroThe Federal Reserve Bank of Atlanta calculates the probability of deflation by using the price of. Read More

ECB Raises Inflation Forecast; Greek Debt Talks Uncertain

By Wednesday, June 3, 2015

ECB Says QE is Working WellEuropean Central Bank (ECB) President Mario Draghi said on Wednesday, June 3, 2015 in Frankfurt that the bank would maintain a steady policy and outlook through bond market volatility. He also said that the ECB is ready to provide more economic stimulus to ensure it meets its inflation target. (Source: European Central Bank, June 3, 2015.)According to the European Union’s statistics agency, annual inflation in the eurozone was 0.3%. Read More

Eurozone Inflation Up to 0.3% in May

By Tuesday, June 2, 2015

Inflation Rises to 0.3 in EurozoneOn Tuesday June 2, 2015, Eurostat, the European Union’s statistics office, released the eurozone area’s inflation data for May, which is at an annualized rate of 0.3%. (Source: Eurostat, June 2, 2015.)All Components Increased Except for EnergyThe positive 0.3% inflation in May is an improvement from April’s zero percent.Among the components, services enjoyed the largest increase of 1.3%, compared to one percent in April. Food, alcohol, and. Read More

Core CPI Increased in April; More Inflation to Come?

By Friday, May 22, 2015

Core CPIOn Friday, May 22, 2015, the Bureau of Labor Statistics released its report on the consumer price index (CPI) for April. The CPI increased 0.1% month-over-month in April. (Source: Bureau of Labor Statistics, May 22, 2015.)Meanwhile, the core CPI, which excludes food and energy (two of the biggest expenses), gained 0.3% in April—the biggest gain in two years.Looking at CPI’s ComponentsThe food index did not change in. Read More

Inflation Expected to Remain Low: Why This Won’t Hold True

By Tuesday, May 12, 2015

Inflation Remain LowOn May 11, 2015, the Federal Reserve Bank of New York released its survey of consumer expectations. The results from about 1,200 respondents suggest that the expected inflation in the next few years will be soft. (Source: Federal Reserve Bank of New York, May 11, 2015.)According to the survey, the coming one-year expected inflation is 2.7%. This is the lowest level since the beginning of the rotating survey in. Read More

Higher Interest Rates: the Good, the Bad, and the Ugly

By Tuesday, May 5, 2015

Higher Interest RatesThe U.S. Federal Reserve has kept interest rates artificially low in order to stabilize the economy downturn of 2008 and 2009. Is it about time the Federal Reserve raises interest rates? Can our economy handle it?You see, under low interest rates, consumers and firms find it easier to borrow money to finance their spending, investment, and operations. Lower interest rates also make stocks and real estate more attractive because. Read More

How I Proved a Gold Bear Wrong About Gold Prices in 2015

By Thursday, March 19, 2015

Bullish gold outlookRecently, I had an interesting conversation with my friend about the current situation surrounding gold prices. He argued gold investments were a drain on your capital; I argued that gold is the next big trade.My Friend’s Bearish Gold Outlook“How can you be so bullish on gold?” asked a friend of mine I met with over the weekend. He argued, “There’s no inflation whatsoever, interest rates in the U.S.. Read More


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From: Michael Lombardi, MBA
Subject: Golden Opportunity for Stock Market Investors

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