Loading ...Rocket Fuel for gold
The Ten Year is yielding about 1.63%. When you subtract the CPI of 2.6% (March number) the real yield on the ten is minus .88%. The price of lumber has risen 30% since the March number. Many other items like Aluminum, you name it are rising sharply. When the April CPI number comes out on May 12 my back of the envelope calculation for CPI is 3.6%! That would make the real yield on the Ten Year Minus 1.88%. That is Rocket Fuel for anything Gold.
Thanks Noman
We have learned THE most important driver of gold is Negative Yields
Norman, I drive by a Tolko Industries Forest Products plant once a week here in BC. Their storage yard of 50-80 acres is the filled to capacity with raw timber. The most I have seen in 12 years. No shortage of timber.
They turn out plywood, OSB, lumber and other related products. They must be working full tilt and can’t meet the demand at the mill level.
Lumber prices are crazy! Prices may drop when housing renos and building slow.
The one item in the CPI basket that dropped substantially is our ICBC government Auto Insurance. Went down 30% with new legislation to curtail legal costs. Wonder if that is just a one off and they will go back up next year. Still, it’s not a big part of my budget.
I’m thinking I’ve experienced an annual 10% cost of living increase. Utilities, food are rising. Same package size but smaller quantity.
I feel for the fixed income retired folk. Their work pension, CPP, OAS and GIS ain’t gonna cut it going forward at a less than 2% annual increase if they are lucky.