The only place deflation is happening is in the housing market
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New York, NY (PRWEB) December 22, 2011
Michael Lombardi, lead contributor to Profit Confidential, has revealed the long-term effects on money printing on the U.S. economy.
As reported by Lombardi, the U.S. Labor Department reported that the Producer Price Index rose by 0.3% in November, an annualized rate of 3.6%. The Labor Department also reported that Import Prices rose 0.7% in November, an annualized rate of 8.4%. The numbers released confirm fears about rapid inflation ahead for Lombardi.
“Government debt gone mad, a central bank buying U.S. Treasuries, and an unprecedented expansion of the money supply; we can’t escape rapid inflation,” says Lombardi.
Looking at the inflation numbers coming from the Labor Department, Lombardi believes that the rally in gold bullion isn’t over.
“The only place deflation is happening is in the housing market,” says the Profit Confidential editor.
Yesterday, the standard 30-year U.S. mortgage rate fell to 3.94%. A home mortgage in the U.S. is currently at the lowest interest rate since 1971, just before the energy crisis hit.
Lombardi believes that rapid inflation will lead to higher interest rates, which will lead to mortgage rates that will rise, putting further pressure on the U.S. housing market.
The Fed has increased its balance sheet by buying securities to the tune of two trillion dollars.
“How can you create two trillion dollars, on top of the five trillion the Obama administration has expanded its debt, and have rapid inflation not become a problem?” writes Lombardi in Profit Confidential.
Lombardi’s simple formula that reveals the long-term effect of money printing: rising government debt plus lots of money printing = rapid inflation, which = higher interest rates, which = higher gold bullion prices, which = higher prices for quality gold mining stocks.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.