The Sovereign Investor

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Since 1998, The Sovereign Society has been at the vanguard of the pursuit for personal liberty and free markets. We enthusiastically support the enduring pursuit of freedom and prosperity, and, to that end, we believe in empowering individuals to make educated investment choices. Through the years, we have assembled a talented and deeply experienced team of analysts, editors and researchers who understand that the best investment and wealth-protection opportunities in any market are often hidden. And our approach has led to a great degree of success. Our independent, uncompromised research has predicted some of the biggest financial catastrophes in recent memory. We were one of the very first financial research firms to warn investors about the dangers in the derivatives market and the threat they posed to the global financial system. We also alerted our readers about the dollars crisis of 2004-2005, the meltdown in the private-equity markets in 2007, the collapse of Lehman Brothers in 2008, and we’ve been sounding the alarm bells about the European debt crisis since early 2010, long before the mainstream media started paying attention. In an age when our personal and economic freedoms are being curtailed like never before, our work has never been more important, and our voice never more indispensable. That’s why we remain steadfast in our mission of scouring the globe for investment opportunities that can only be unearthed by our exhaustive, “boots-on-the-ground” approach. With a daunting economic era ahead of us, our purpose is providing our subscribers with the unvarnished truth in an industry filled with artifice and obfuscation. We realize that a world of investment opportunity exists in stocks, commodities, currencies and asset protection that are often overlooked. Our mission is to bring them to you each day. Interested in joining? Sign up for The Sovereign Investor Daily Daily today! (It’s FREE!) Visit

Beware the Fed’s Hubris on Inflation

Inflation Sprouts Anew

Sometimes you have to stand back and look at the bigger picture. Here’s what the ups and downs of consumer prices look like on a rolling 12-month basis:

Inflation CPI Change Per Year

In other words, annualized gains in consumer prices — having crashed to below 1% in the wake of the housing bust, financial crisis and bailout of the nation’s megabanks — are getting closer to the 2% to 3% levels of precrisis years.

Another lesser-known, but closely watched piece of inflation data is the personal consumption expenditures price index, or PCE for short. That, too, is ticking higher in a meaningful way, hitting nearly 1.7% — its highest level since early 2013.

So, is that all we should expect from inflation — a move back toward what’s considered “normal”? Or is this the start of a bigger, more dangerous inflationary trend?

Hear No Inflation, See No Inflation

Wall Street’s view is basically, “What’s good enough for Janet Yellen is good enough for us.” And with the Fed chair, in her recent speeches, expressing confidence in more benign inflation, it’s no wonder that the major stock indexes are still heading toward new record highs.

Others aren’t so sanguine. Blackrock’s main strategist, Richard Turnill, put it succinctly last month: “Stabilizing oil prices and a tighter labor market could contribute to rising actual, and expected, U.S. inflation.”

The folks over at the Pimco, who worry about lots of bond mutual fund portfolios, are likewise ringing a warning bell. Their main economic advisers are telling everyone who will listen that the bond market is being lulled to sleep by inflation expectations that are way too low.

Additionally, the head of interest-rate strategy at Wells Fargo’s brokerage arm told Bloomberg recently that the Fed “is running the risk of getting more than they asked for. They are overconfident in thinking they can rein in inflation.”

How do you protect yourself from the Fed’s “we have it all under control” hubris? As The Sovereign Society has long warned, gold’s huge price spike since the start of the year ought to tell you something. It’s a big, red “no confidence” signal in the Fed.

Clearly, bond investors could care less at the moment. The 10-year Treasury note’s yield is just shy of 1.8% today, and it’s not hard to see why buyers would pay so much to receive so little in return. Fear of deflation and flight to safety have been the chief concerns for close to a decade. Old thought patterns are hard habits to break.

On the one hand, if markets are supposed to “discount the unknown,” as economists tell us, then it’s hard to see how much more “worry” the bond market can really price in when it comes deflationary fears.


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