The Mises Institute says that gold’s value will become more apparent in the coming months and years as the government is forced to find a way out of the fiscal, monetary, and political hole it has dug for itself. Precious metals advisor Claudio Grass says that threats to financial sovereignty, government power grabs, increased monitoring, and control over private assets and savings are all likely to become more dire. He argues that under these conditions, physical gold really shines. In other news, findings from the Penn Wharton Budget Model indicate that U.S. debt will likely spiral to new highs. The analysis found that the national debt will rise to 225% of U.S. GDP by 2050. It’s important to remember that as that debt climbs, so do the interest payments on it.

The Mises Institute via ZeroHedge/Claudio Grass
Gold Is Money: Everything Else Is Credit

Throughout the better part of 2022 there has been one question that has consistently, and predictably, popped up in conversations with my friends, clients and readers. Those who know me and are familiar with my ideas are well aware of my position on precious metals and the multiple roles they serve, so I can’t blame them for them for being curious whether I still “stick to my guns” in this era of irrationality in the markets and the economy.

Especially for those not versed in monetary history, which is regrettably the vast majority of the population, it is natural to wonder: “If gold is such a great hedge against inflation, why hasn’t it skyrocketed now that inflation is finally here?”

Well, there are a couple of reasons for that, some more obvious than others. The interest rate hikes that the Fed spearheaded and repeatedly escalated are the most straightforward explanation. At least that’s the answer most mainstream economists and analysts will give you. And it makes sense: If gold pays you no interest for holding it, then why not switch to something that does? This is the mindset of most investors and that weakens demand, which in turn drags the price down. That’s how the theory goes anyway.

You can read the full story, here.

Fox Business/Megan Henney
US national debt on pace to be 225% of GDP by 2050, Penn Wharton says

The U.S. national debt is on track to continue surging over the next three decades, spiraling to a new high that could ultimately endanger the economy, according to a new analysis published on Monday.

The findings from the Penn Wharton Budget Model, a nonpartisan group at the University of Pennsylvania’s Wharton School, found that under current law, the national debt will rise to 225% of U.S. GDP by 2050.

“Current U.S. fiscal policy is in permanent imbalance as current debt plus projected future spending outstrips future tax revenue,” the analysis said. “Achieving fiscal balance would require the federal government to permanently increase tax revenues by over 40% or reduce expenditures by 30% or some combination of both.”

You can read the full story, here.

Kitco News/Cornelius Christian
Inflation in 2023: How bad will it get? Two great economists debate causes of inflation, outlook – John Cochrane & Steve Hanke

The question of what causes inflation, defined as a general increase in prices, is salient in 2022 given the year’s high CPI numbers. In June of this year, inflation hit a peak of 9.1 percent, a rate unseen since the late 1980s.

When it comes to the question of causation, Steve Hanke, Professor of Applied Economics at Johns Hopkins University, argued that changes in the money supply drive inflation.

“We know there are lags between changes in the quantity of money and economic activity,” he said. “If you increase the money supply, you get essentially a proportional increase in inflation.”

John Cochrane, Senior Fellow at the Hoover Institution, argued that taxation and government spending are at the root of inflation.

“I look at the primary cause of our current inflation being that $5 trillion deficit, no matter how it was financed,” he said.

Read the full story, here.

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