Gerardo Del Real,
Editor
July 6, 2021
“All assets are going to the moon and the moon is becoming a very busy place.”
That’s a quote from Sven Henrich. And I found it an appropriate description of current monetary policy and its unintended — or intended — consequence.
U.S. existing home prices just hit another all-time high and, what a coincidence, so has the Fed balance sheet.
Despite all evidence to the contrary, the Fed continues to insist that inflation is transitory and that Fed policies do not add to inequality.
Here’s a fun fact. Since the lows in March the net worth of the top 10% has increased by nearly $20 trillion. The net worth of the bottom 50% has increased by $0.7 trillion.
Here’s another fun fact. Sales for homes priced over $1 million have increased by 245% over the past year. Sales for homes priced under $100,000 have contracted 11%.
Despite the Fed now admitting that inflation will now last longer than initially anticipated (6-9 months instead of 2-3), gold saw itself take a steep drop to the $1,763 level.
But gold is now once again over the $1,800 level as reality sets in that the Fed really won’t be doing much of anything other than printing more money and sending more asset classes to the moon.
The May core personal consumption expenditures price index, rose 3.4% from a year ago — the fastest increase since the early 1990s.
The bottom line is the Fed will continue to ignore inflation and insist it is transitory. It may have the cover to do so because companies simply haven’t been able to fill positions.
April saw job openings in the U.S. soar to 9.3 million million jobs. That’s a new record for the most openings added in a month.
That’s also the highest overall number since the Bureau of Labor Statistics started tracking the data in December 2000.
Noticing a lot of new all-time highs recently?
Stock market. Job openings. Record amounts paid for collectibles that include boxes filled with air.
These are not normal times.
Everything is awesome. Until it’s not.
Use the summer months to top off positions in your favorite juniors... as I suspect the recent consolidation in the space is getting closer to an end.
I also suspect the next run higher will be a memorable one.
Let's get it!
Gerardo Del Real
Editor, Daily Profit Cycle
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Daily Profit Cycle, Junior Resource Monthly, and Junior Resource Trader. For more about Gerardo, check out his editor page.
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