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The problem will be, or the second problem will be when the dollar starts to fall, because the dollar index has been holding strong. The dollar index is around 102 because currency traders are once again not understanding these hot inflation numbers. They think this means the Fed will continue to raise rates.
It doesn't matter if they raise the rates. The increases they are prepared to make are far from sufficient if inflation actually rises to the levels these figures indicate . Let's say we have 7%, 8 %, 9% inflation, and the Fed is at 4.75% or even 5%, I love gold. The look, the taste, the smell. But seriously, it's been a while since I did a Friday Schiff Gold Market Review, and it's been an incredible week to recap.
In fact, the week ended with a triumvirate of bad inflation news on Wednesday, Thursday and Friday. All the news was hotter than expected, which means inflation was higher than expected. Ironically, as has been the case for many months, all this bad news about inflation was actually bad news for gold and silver, according to traders, because they were selling gold and silver.
And again , the reason they do this is because they interpret worse- than-expected inflation news as a sign that the Fed will have to become more aggressive. It will have to act decisively in its fight against inflation. It is going to raise rates significantly and possibly reduce the balance sheet, and it is this fight against inflation that worries traders, which is why they are selling gold.
But if they really understood that hotter than expected inflation numbers don't mean the Fed is going to fight inflation harder. This means that the Fed has already lost. Inflation won. Here's what the numbers show you. The markets still don't understand that even if the Fed raises rates two or three more times, it doesn't mean anything.
Inflation is accelerating much faster than the Fed is raising rates. Meanwhile, the Fed, especially Kevin Warsh, is just words. Everyone thinks he's such a tough fighter against inflation. He is Paul Walker in a new incarnation. This is all nonsense. He has been the chairman of the Fed for 5 months.
And what did he do in those 5 months ? Raised interest rates by 25 basis points. Big deal. This is ridiculous. And he probably doesn't even intend to raise them another 25 basis points before December. So what? And look at the balance. The Fed's balance sheet is larger today than it was 5 months ago when he became Fed Chairman.
And the M2 money supply has grown by almost 6% year-on-year over the past 5 months. These are not the actions of an inflation fighter, nor the actions of a "hawk." These are the actions of a "dove." So, Vorsh is a "dove" in a " hawk's" skin. Forget what he says, look at what he does. And markets will soon realize that he only barks but doesn't bite when it comes to fighting inflation.
But let's look at the terrible numbers we got, which should have sent gold up hundreds of dollars an ounce this week if traders really understood inflation, interest rates, bond yields, and the Fed. But fortunately for us, they don't understand each other. They don't understand anything, which means Schiff Gold customers get another opportunity to buy more gold and silver.
Gold fell half a percent in a week. It closed at around $4,145, although it should have risen. This is good news. You can buy more gold at a cheaper price because traders don't understand what will happen. The September 2026 consumer price index was a serious warning of renewed price pressures in the United States.
According to the Bureau of Labor Statistics, consumer prices rose 0.6% month-on-month , while the annual inflation rate reached 3.7%. Rising gasoline prices played a significant role in the monthly increase. These numbers matter because persistent inflation reduces the purchasing power of households and complicates the Federal Reserve's decisions.
Political leaders may argue about who is responsible, but economic analysis requires a collaborative examination of policies, energy costs, supply conditions, and monetary developments. The main question is whether inflation will slow down or remain stubbornly high. Silver fell even more, so you got an even bigger gift.
Silver ended the week down about 3%, closing around $56.85. In fact, during the week it even dropped to 55 or so. This is a great buy. Get silver back below $60 , especially with all the bullish news that came out this week, which traders just don't realize how bullish they are. I'll start, actually, with the least scary of the bad reports that came out on Wednesday, and I've already discussed this on my main podcast, but I'll do it again .
And this is the CPI. These are all numbers for September. So, the September CPI increased by 0.6%. That's a big move in one month. But you know what's even more— when you calculate it on an annual basis. If you multiply that by 12, that's an annual rate of 7.4. This is considerable inflation. They never annualize monthly figures , as they do with GDP.
When they report GDP , they always list it per year. So, if there was half a percent growth in the quarter, they report 2% GDP growth. They multiply by four. So why don't they multiply the monthly inflation rates by 12? Because they want the number to look as small as possible. Lest you think, "Oh, that's 0.6%.
That's not so bad." Yes, but that's in one month. If this happens every month for a year, it would be 7.4%. Core inflation year- on-year was 3.7%. Excluding food and energy, the figure was higher than expected, as other bad news was forecast. The core figure rose 0.3%, 50% more than expected. And the annual base rate increased by 2.6%.
And that was higher than the expected 2.5%. Gold and silver prices fell sharply on this news. Just like in the bond market. Although the bond market has since recovered, yields, in my opinion , have reached new highs due to this bad inflation news. But you know, when you hear Republicans talking about inflation now, they try to prove how Trump supposedly significantly reduced the inflation rate.
They point out, "Oh, under Biden it was 9.1%, and under Trump it's only 3% now." They say that Trump has curbed inflation, and the problem is just a legacy from Biden. So, we're doing a great job. This is all complete nonsense. Under Trump, inflation is getting worse, not better. In the first 9 months of 2026, the consumer price index increased by 4%.
We still have three months left until the end of the year. I am confident that the overall inflation for the year will be 5%. The pressure intensified when the producer price index for September showed an even sharper increase. The US Bureau of Labor Statistics reported that producer prices for final goods rose 1.3% month-on-month and 6.3% year-on-year.
Energy prices made a significant contribution: the cost of energy for final consumption increased by 10.8%. Producer prices measure what businesses receive for their goods and services, which provides an understanding of changes in costs in the economy. However, higher wholesale prices do not automatically translate into corresponding consumer inflation.
Companies can take on some of the costs themselves or shift them to others. However, prolonged growth could threaten corporate profits, household budgets, and expectations for future price stability. But even if we take this 4% that we have now, for the entire year of 2024, Biden's last year in office, the CPI grew by 2.9 % over the entire 12 months.
Already 4%, and there are still 3 months ahead. A year earlier , in 2023, inflation for the whole year was 3.4%. Now our figures are higher. So, inflation in just the first 9 months of this year is already worse than in the entire fourth and entire third year of Biden's presidency. So how can you say that this is a fight against inflation if it is higher now than it was in 2024 or 2023 ?
Of course, this is not yet higher than in 2022, when it was 6.5%, or in 2021, when it was 7%, but it will be higher. I believe that next year, 2027 , the CPI could grow by more than 7%, and this could happen again in 2028 . When Biden was president, the CPI peaked in the first year. Each subsequent year of his presidency, the CPI became lower.
With Trump, everything will be the opposite. Every year during Trump's presidency, the CPI situation will worsen. I'm not saying Biden was a great president. No, he wasn't. He was a bad president and his policies were inflationary, but so are Trump's policies. However, if you look at the numbers under Biden, we had 4 years of declining inflation.
Under Trump, we will have 4 years of rising inflation, and I am sure that on average, the CPI over Trump's 4 years will be higher than under Biden. And ironically , Biden's first year was the worst—7%—precisely because of Trump's monetary and fiscal policies in 2020. Trump laid the groundwork for that spike in consumer prices with his fiscal policies and the Fed's monetary policies during his time in office.
So, Biden inherited this serious problem from Trump. Trump constantly talks about inflation, which he allegedly inherited from Biden. Well, Biden inherited it from him. I'm not saying that Biden hasn't added to the problems that will manifest themselves under Trump. Much of the inflation we will experience in the coming years can be explained by Biden's policies, but Trump made it worse with his big " wonderful" law.
Moreover, after the midterm elections, when Republicans are likely to lose the House and Senate, the budget deficit will become even larger. The reckless bills that the Democratic Congress is about to pass will cause even more inflation than those passed by the Republicans, and Trump will sign them anyway .
This will not be a political stalemate. Trump will sign them, and, in fact, the 2024 election was about inflation, the cost of living, and the affordability crisis. Well, the 2028 election will be about the same thing, only things will be even worse. In 2028, inflation will be a much bigger problem than it was in 2024.
In 2028, we will face a much bigger affordability crisis than in 2024. All elections will be about whose fault it is. Who should be held responsible? Republicans, of course. Well, they'll probably blame Biden anyway, right? You blame Biden for everything , but they will also blame the Democratic Congress.
The Federal Reserve faces a delicate balancing act : contain inflation without harming economic growth or stability. Higher interest rates can curb lending and spending, helping to reduce demand, but their impact on the economy takes time to manifest. Chairman Kevin Warsh emphasized a data-driven approach , avoiding promises of future decisions until formal meetings.
Accordingly, markets compare current inflation rates with signals from Central Bank officials. If inflation remains high, policy tightening is possible. However, excessive tightening could exacerbate financial tensions. The outcome depends on the development of economic conditions, not simply on political promises or assumptions about the actions of the Central Bank.
And, um, Republicans will say, “Look, you elected Democrats, and look what happened to inflation. She flew to heaven . I told you. Trump said, “I warned you not to vote for Democrats. It's all their fault. "Yes? So, Republicans will try to blame everything on the Democratic Congress. Um, but the Democrats, of course, will blame everything on Trump.
So it will just be a blame game. Everyone will point the finger at someone else or at another party. And the public will have to decide, but given past experience, they usually blame the party in power in the White House. So the Republicans will remain extreme, and that's why I think the Democrats will win in 2028, uh, with the radical left, the democratic socialists, and a democratic Congress.
And you'd better buy gold and silver now, before investors figure out what this means. So, after we got the CPI data, the very next day, and I didn't talk about this before because my other podcast was recorded on Wednesday. This came out on Thursday. We got PPI. And if people thought the CPI was bad, the PPI was significantly worse.
And what's even worse about the PPI being so bad is that it's a leading indicator for the CPI. Because before consumer prices rise, producer prices rise . This is a chain. Businesses have rising costs and prices, and then they pass this on to the consumer. So if you want to know what will happen to consumer prices in the future, look at producer prices today.
And when you look at producer prices, it's an unpleasant picture. So, the consensus forecast predicted a 0.5% increase in producer prices. And that would be slightly more than 0.4% in the previous month. Instead, they grew by 1.3% per month. This is almost three times more than analysts expected. And again, if the annual calculation of this indicator is 17%—producer prices increased at an annual inflation rate of 17% in September.
Does this look like the Fed is winning the battle against inflation? It seems inflation has crushed the Fed. Year-over-year, they expected producer prices to increase by 5.6%. Instead, they grew by 6.3%. The core index was expected to increase by 0.3%, but increased by 0.7% for the month. If converted to an annual rate, it is 9%.
9% core inflation? Inflation is getting out of control. And the Fed is "asleep at the controls." In fact, Bostic gave a speech, I think last night or early this morning, that got everyone excited because even though he already had all these bad inflation numbers, in the speech he didn't express any concern about these numbers or that the Fed should be more aggressive than it already is.
And this has led to expectations of a rate hike in October before the election falling from around 40-45% to around 15%, because apparently it does n't even matter. And I was actually watching CNBC when they were covering these bad numbers. They knew the CPI numbers, they knew the PPI numbers and they said that this was problematic for the Fed because it showed that inflation was not coming down as quickly as they had expected.
What do you mean by " not declining as fast as they expected"? It is not decreasing at all . Inflation is rising. Inflation is accelerating. I mean, they decorate everything. They act as if the only problem is that it's going down more slowly. It is not decreasing at all. It is growing. This is a much bigger problem.
The Fed believed that inflation would tend to decline. Instead, it is rising rapidly, and in fact the worst numbers this week came out today. They left on Friday. And these are probably the most reliable indicators. These are import and export prices. And the reason I find them the most reliable is that they are not adjusted.
There is no substitution here. There are no hedonistic adjustments here. These are just real prices. Therefore, import prices were expected to increase by 0.6%. Instead, they grew by 1.1% per month . This gives 14% annual inflation in annual terms. Precious metals hold a special place in times of economic uncertainty.
Gold does not generate interest, so higher bond yields may reduce its relative attractiveness. Instead, fears about inflation, currency depreciation, and financial instability may increase demand for gold as a store of value. Silver has some of these characteristics, but is also heavily dependent on industrial demand, making its price movement potentially more volatile.
Energy markets add another layer of uncertainty. Rising oil prices could increase costs for transportation, manufacturing, and household needs. Meanwhile, fluctuations in the US dollar exchange rate affect international commodity prices. Together, these interconnected markets show why investors cannot interpret any single price movement in isolation.
So, on an annual basis, import prices actually increased by 8.1%. We buy a lot of imported goods in this country. Almost everything we buy in products is imported . And 8.1%—that's not at all like 2%. That's not even close to the annual overall consumer price index, which appears to have been around 3.7%.
But look at export prices. Export prices were expected to increase by 0.9%. Instead, they grew by 2.2% in one month. This is the annual inflation target for one month. Even more . The Fed wants inflation to be 2% per year. And export prices increased by 10% more than that—2.2% per month. One month. Year-on-year, export prices have now increased by 11.6%.
But, you know, if you calculate this 2.2% per year, it's 30%. 30% inflation. These numbers are simply incredible. But the Fed doesn't even care. The markets and financial media don't even pay attention to it. I know you might say, "Well, Peter, why should we care about export prices? That's someone else's problem.
We don't have to pay for it , right?" This is what our trading partners have to pay. No, because it reflects the internal cost of production . Because much of what we export, we also consume. It's not like we export everything. We export, you know, surpluses. We consume a lot of things ourselves. So prices are rising rapidly.
Of course, I don't expect the numbers to be this hot every month. But they will become even higher. Look at oil prices. Today, oil prices again exceeded $101 per barrel. This is about the highest level that has ever been. Brent crude oil is now worth over $110 per barrel. And the only reason, in my opinion, or the main reason, why we're not getting close to $150 a barrel right now is because we're depleting the Strategic Petroleum Reserve.
This will stop after the midterm elections, because we can't completely destroy it . You just can't do that because then there will be problems. We are almost at the minimum possible level. So I think they are just trying to squeeze everything they can out of their reserves to keep oil prices as low as possible before the election.
But even despite attempts to keep prices down, oil still costs over $100 per barrel. So prices will really skyrocket after the midterm elections are over. So imagine what those numbers will look like later this year. And the second problem will be when the dollar falls, because the dollar index is holding steady.
The dollar index is around 102 because currency traders again don't understand these high inflation rates. They think this means the Fed will continue to raise rates. It doesn't matter if they raise rates. The increases they are prepared to make are far from sufficient if inflation actually rises to the levels these figures indicate.
Let's say we have inflation of 7%, 8%, 9%, and the Fed keeps the rate at 4.75% or even 5%—who cares? It doesn't matter. But a huge crisis is brewing that will prevent the Fed from even completing the rate hike. They will probably have to lower their rates. We will probably have to launch massive quantitative easing, and that's because of what's happening in the bond market and the mortgage market.
The rate on a 30-year fixed-rate mortgage has reached 7.5%, and a crisis is brewing in the mortgage market due to the losses that mortgage lenders are currently experiencing on paper . The broader economic challenges go far beyond the latest inflation statistics. High borrowing costs constrain mortgage markets, make refinancing difficult, and expose vulnerabilities of lenders and heavily indebted households.
If financial stress intensifies, policymakers will have to address the conflicting challenges of maintaining economic stability while simultaneously containing inflation. Gold and silver can be profitable under certain conditions, but neither of these assets guarantees protection against losses. Their prices remain sensitive to interest rates, currency fluctuations, investor sentiment, and global demand.
Ultimately, the coming months will be a test of resilience for households, businesses, and financial institutions. Fact-finding, critical thinking about confident predictions, and risk management remain crucial in times of economic uncertainty.
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