Commodities
The First Pillars of Civilization: Hot Water and Affordable Food
Inflation Bites Another month, another sky-high CPI print: at 9.1%, the highest year-over-year inflation since 1981. Of course, the methodology of constructing this index has changed over the decades; if the methodology employed in 1990 were used today, the reported rate would be 17.3%, according to ShadowStats. Even this is Read more
Commodities
Commodities: Crosscurrents and Undertow
Another month, another blistering inflation report; the consumer price index rose at a 7% annual rate in December. Of course, as our regular readers have heard us say often, the methodology used to calculate that rate has changed often over the decades — invariably in a way that understates the Read more
Commodities
We Warned You It Would Be Hot — Guild Basic Needs Index Up 30.7% Year-on-Year
We noted last week that we’d provide you with October data on our in-house real-world inflation measure, the Guild Basic Needs Index (GBNI). Here it is: up 30.7% year-on-year. (The GBNI is constructed to reflect the price of essential living expenditures, without statistical manipulation or adjustment. For more details about Read more
Commodities
Guild Basic Needs Index — Update
With May data complete, the Guild Basic Needs Index (GBNI), our proprietary real-world inflation gauge measuring the price of a basket of four essential consumer goods, has backed slightly off April’s 25% year-over-year pace. (You can click here for a more detailed description of how we compile this measure of Read more
Asset Allocation
How Inflation Can Crush Your Portfolio During a “Lost Decade” — Unless You Adapt
Last week, we noted that the typical 60/40 stock/bond portfolio allocation that has become an investing commonplace in the past several decades has historically produced many “lost decades” — periods of ten years or more that saw little to no advance in the portfolio’s real value. Source: GMO Capital Of Read more
Commodities
Hedging Inflation With Commodities: What Decades of Experience Have Taught Us
The current investment environment suggests one critical lesson to us: the future into which we are moving is going to be very different from the immediate past. Therefore, investment strategies which have become standard-issue conventional wisdom over the past few decades are going to fail. Investors will have to reach Read more
Commodities
Commodity Price Drivers: The Rational, the Irrational, and the Unpredictable
Many commodities have boomed, driven by a confluence of forces: ongoing monetary and fiscal stimulus; accelerating post-pandemic global economic growth; long-term underinvestment in commodity production capacity; pandemic-related supply chain and shipping disruptions; the rise of sustainability metrics for public companies; the push for decarbonization and the electrification of the global Read more
Commodities
King Dollar, Gold, and Financial Repression
Gold’s rise continues. Since the shock-and-awe fiscal and monetary response to the covid shock got underway in March and April, we’ve been pointing out the obvious long-term impetus it would provide for gold. We won’t rehash all the data here — the big picture is obvious enough. The monetary expansion Read more
