Agoracom Blog

Vicious Money Printing Cycle = Junior Resource Stocks

Posted by AGORACOM at 8:36 AM on Thursday, January 13th, 2011

“Quote the chairman: “This fear of inflation is way overstated. We’ve looked at it very, very carefully. We’ve analyzed it every which way… We will not allow inflation to rise above 2% or less… I am 100% certain i can control inflation.” Presenting the Jefferies global commodity index (CRB) which just hit a 27 month high.” Tyler Durden – Zero Hedge

The downside to printing money for the purposes of stimulating the economy is that commodities rise, which makes things more expensive, which leaves people less money to stimulate the economy.  Nonetheless, Ben Bernanke and The US Fed continue to claim inflation is under control.  The data below clearly shows otherwise.

American disposable income is getting chiseled away at the gas pump and grocery store.  Their pocket books don’t lie and they certainly won’t stimulate the economy by purchasing real estate and “stuff”.  The ironic thing is that Bernanke will use the lack of consumer spending as a reason to keep printing money, which will lead to further inflation, which will lead to decreasing discretionary spending, which will lead to further deferral of “the recovery”, which will lead to more money being printed.

The answer to staying out of the vicious circle?  Gold, Silver, Junior Resource Stocks.

Chart below courtesy of the good people at

One Response to “Vicious Money Printing Cycle = Junior Resource Stocks”

  1. Anthony Maw says:

    Maybe if those proud, freedom-loving Americans spent less resources building and maintaining their massive military-industrial complex to invade small countries, stopped pandering to their corrupt and immoral Wall Street bankers, and stopped exporting jobs for the sake of corporate profits then maybe, just maybe, the United States economy might have a chance of “recovering”. The recent US stock market rally is also caused by this “easy money” instead of industrial output growth and greater employment means danger ahead.