Is Higher Inflation Coming?

Yesterday we addressed the recent price action in gold.

Specifically, I noted that gold was rallying because central banks had sent a clear signal that they would be forced to cut rates and launch new QE programs.

This has meant that globally bonds have begun to pay negative yields. In this situation, the lender is actually PAYING for the right to lend the borrower money!

Gold, with zero yield, is actually attractive relative to the $19 trillion in debt that has NEGATIVE yield. For this reason, gold has been rallying alongside bonds in the last few months.

The below chart shows how gold has been tracking the Long-Term Treasury ETF (TLT) almost tick for tick.

Gold has been mirroring bonds

This raises a larger question. Is gold moving based solely on negative yields… or is it also rallying based on the belief that higher inflation is coming?

To answer that question, we turn towards the entire commodity index (symbol: CRB).

Commodities: A Real-World Indicator of Inflation

Commodities typically perform well during periods of higher inflation. With that in mind, the chart of the commodity index will give us a decent idea of what is coming down the pike.

The below chart shows that commodities have repeatedly held support (lower orange line) in the last few years. The big question is whether they can finally break their multi-year downtrend (upper orange line).

If they do, then higher inflation is coming…

Can Commodities Break to the Upside

I’m keeping my eye on this chart… particularly because if higher inflation IS coming, it is going to mean SEVERE currency volatility.

Higher inflation means currencies falling fast. When this happens, you can make a literal fortune trading currencies – provided you have the right system.

This is why I’ve spent the last six months developing a proprietary trading system, Alpha Currency Profits, to do exactly that.

Since its creation, Alpha Currency Profits has shown returns of 52% in two days, 75% in five days, 79% in four days, and even 100% in just four days.

Heck, just last week we closed out gains of 34% in one day and 44% in five days!

If you’re interested in seeing these kinds of returns, you can find out more about this unique trading system below… and the best part is, we’re trading currencies without touching the dangerous foreign exchange (FOREX) market!

Best Regards,

Graham Summers

 

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Graham Summers

Editor Graham Summers has spent the last 15 years building a reputation as one of the most sought after and highly respected investment strategists on the planet. His work has been read and quoted by former Presidential advisors, award-winning institutional analysts, U.S. Senators, and more. He’s one of the few analysts on the planet to...

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