Chart–Why the Market Is Going Higher, and Inflation Is Heating Up

Here’s a chart of the U.S. Monetary Base …

Any time you have more and more of something, the individual pieces of it are worth less and less.  That applies to the dollars in your wallet, too. 

Monetary policy is decided by the Federal Reserve.  Rage against Helicopter Ben Bernanke if you like.  But the latest version of Congress is refusing to spend money on stimulus we desperately need – trains, dams, bridges, education, job training and so on.  So, Ben gives us the only stimulus he can – creating more money. It’s a sideways approach to the problem, but when all you have is a hammer, every problem becomes a nail.

In every crisis there is opportunity, and sure enough, this flood of money is bullish for the positions I’m recommending to my subscribers in Red-Hot Global Resources and Crisis Profit Hunter.

But don’t kid yourself. This will likely end badly. Gold and silver and other hard assets, as well as select stocks and funds, can be your cushion against a hard landing.

Tagged as: Federal Reserve, U.S. monetary base

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