Bitcoin jumps toward $49K amid fears 5%-plus inflation is here to stay

The rush to so-called safe-haven cryptocurrency appears despite concerns that the Federal Reserve would taper its $120 billion a month asset purchasing program.

Bitcoin jumps toward $49K amid fears 5%-plus inflation is here to stay MARKET ANALYSIS

Bitcoin (BTC) inched higher on Sept. 18 as the focus shifted to the Federal Open Market Committee's (FOMC) policy meeting in the wake of lower inflation numbers last Tuesday.

The BTC/USD exchange rate approached $49,000 on the Coinbase exchange, hitting $48,825 before turning lower on interim profit-taking sentiment. Nonetheless, the move uphill raised expectations that the pair would hit $50,000, a psychological resistance target, in the coming sessions.

Boom Signal

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Ultra-low interest rates and non-stop money supply growth are fueling the race to the bottom for global currency devaluation.

Frightening Stats

For instance, did you know that the global money supply has grown by over 5x in the past 20 years?

Here’s a chart that shows global money supply growth over the last two decades:

Boom Signal

Massive amounts of government stimulus, negative interest rates, and ultra-low bond yields around the world have paved the way for soaring gold prices these past two years… setting investors up for a run at another long bull market.

The exciting part is that there’s still a lot of room left to run…

Up the Price Pipeline, Inflation Rages at 20%

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By Wolf Richter for WOLF STREET.

We’re going to go step by step so you don’t get dizzy right away. The Producer Price Index for Final Demand – these are input prices for consumer-facing industries and are the next step up in the pipeline for consumer prices – jumped by 0.7% in August from July. This pushed the year-over-year increase of the PPI Final Demand to 8.3%, the biggest year-over-year jump in the data going back to 2010.

Prices for goods jumped by 1.0% month-over-month, including food up 2.9% (35% annualized), with meats up 8.5% (102% annualized), while energy rose 0.4%.

Prices for services jumped by 0.7% month-over-month, including a 2.8% spike in transportation and warehousing costs (34% annualized), reflecting port congestion, spiking container freight rates, backlogs, and general chaos in peak shipping season before the holidays.

Gold Leads the Way for Silver

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Last week we wrote about the gold to silver ratio. Our points were that it measures the price of one metal against the other, just as we use the dollars per ounce to measure daily metals prices, and just as we use ounces per Corvette to measure purchasing power preservation.

Also, we discussed the range of movement that silver has around gold over the past fifty years.  We laid out notes for when to buy silver against gold, and when not to.

The Long Run Relationship Between Gold and Silver

Today we expand on the gold to silver relationship. Traditionally, gold moves first, with silver following but moving relatively more. 

Since the 1970s, in all the big price moves studied, we find that although silver goes farther, gold leads the way by moving first. 

Theory of Relativity

From its source on the Tibetan plateau, the Yangtze River winds its way 3,900 miles through China and terminates near the mega-city of Shanghai.

The Yangtze is one of the world’s longest, most powerful rivers.

For more than 2,000 years, it has played a key role in Chinese history as a source of drinking water, a crop irrigator, and a transportation network.

Although the Yangtze has supported lives, it has ended many others. In 1931, torrential rains caused the Yangtze to flood its banks.

This wiped out crops and lead to the deaths of an estimated 3.7 million people, making it one of the deadliest natural disasters in history.

In 1954, another round of flooding resulted in the deaths of more than 30,000 people.

Buy Gold Before Economic Growth Grinds to a Halt

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By Andrey Dashkov, analyst, Casey Research

This week, Wall Street is watching the Fed.

On August 27, the country’s arguably most powerful financial institution provided the market with a clue as to how fast it would start tapering its asset purchase program.

In other words, we learned how soon the Fed is going to stop providing the market with a massive amount of support.

The majority of Fed officials believe that this “tapering” should start this year.

Fed Chair Jerome Powell said:

[…] I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year.

Why would they stop this massive support program? Because, the theory goes, the economy is picking up, and the high inflation numbers we’re seeing are transitory.

My Three-Pronged Approach to Beating the Market

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By Steve Sjuggerued
The key to successful investing isn't what you'd expect...

You don't need to understand everything. You don't have to look at every number. And you can certainly know too much – which often leads to your ego getting in the way of common sense.

Instead, the key is finding the right things to study.

You simply need to figure out what really matters... what works... and then forget everything else. Everything else is just noise. And focusing on the noise will distract you from what's important.

I've spent thousands of hours researching what works in investing. And I've come up with a simple concept that has proven to be an incredibly successful way to make money.