Price inflation hits 1981 highs
Today's report of 7% inflation is the product of a Consumer Price Inflation formula that has been altered since 1980 in order to provide more acceptable (lower?) results. If today's CPI were calculated using the 1980 formula, it would match the whopping 15% in 1981 that required double digit interest rates to bring inflation under control.
Gold demand historically has a direct relationship with reported CPI. Does today's under reporting method of CPI by 50% result in half the demand for gold that would normally take place at a CPI of 15%?
More importantly will it take 1981's 16.63% interest rates to bring down to earth a current CPI that is in affect the same as the 1980 15% CPI? Will three or four small proposed FED rate bumps in 2022 do the trick? Most likely not.
"Do you hear alarm bells ringing? Neither do I. And that’s a huge problem." - Simon Black