GOLD AND RATE HIKES IN AN ERA OF MMT & CHAOS

 "And it shall come to pass in those days that none shall be saved, Either by gold or by silver, And none be able to escape." — The Book of Enoch 

- James Passin

The widely followed indices of inflation are finally invalidating the "inflation is transitory" narrative, replaced in the media by a new "inflation is a good thing" narrative.

It is my view that what will prove transitory is the pivot in Fed policy, as the successful infiltration by followers of Modern Monetary Theory ("MMT") into the ideology of many policymakers will provide cover for continued "money printer goes brrr" operations even in the context of "fighting inflation." MMT makes the false claim that inflation can be constrained through the imposition of confiscatory rates of taxation.

Given that the Fed has started a significant tightening cycle, it is surprising that gold is down less than 10% from its March 2022 peak and remains in the $1,700 $2,000 trading range that has generally held for the last two years. It is a bullish sign that gold is holding up, instead of correcting to $1,300.

In this environment, bellwether U.S. gold coins are holding onto impressive premiums. One example: The Saint-Gaudens double eagle graded MS-65 by Professional Coin Grading Service or Numismatic Guaranty Company, and verified as to its grade by the Certified Acceptance Corporation, is commanding about $3,000 sight-unseen. Considering this vintage coin contains nearly an ounce of gold, a premium of about 70% above its melt value is impressive.