Article in this morning's San Antonio Express newspaper suggests that a rise in interest rates would have an inverse impact on precious metals prices. I'll have to scratch my head and figure out the mechanics, but it seems valid.
Given recent increases in prices of goods and services, and the inept means of measuring and reporting inflation, the Federal Reserve has been cautious about using interest rates to control inflation. The most likely reason is that the Fed isn't the only source of cash, now that the world is flush with it from U.S. (public and private) spending habits.
Demands for cash by business & industry could be satisfied by untold sources (foreign & domestic) ready to lend no matter what level the Fed sets it's interest rate. Then who would be in control? Who would suffer? What impact would raising the interest rate have across the spectrum?
There is no doubt prices for common consumption items have increased considerably over the years, certainly at a faster pace than GDP, meanwhile exerting undeniable downward pressure on the standard of living. The politicians have adjusted the metrics to portray their economic plan as viable and vibrant. The reality is, there is much deception in glowing reports about the health of the economy at all levels. Consider anything you read about the health of economic conditions to be some form of propaganda and examine carefully the motivation of the writer before assigning it any credence.
It's budget and borrowing season for local governing bodies. You will see bragging about record profits extracted from public/private monopolistic enterprise operations and looting of an industry-standard percentage by bureaucrats to further enhance their personal financial posture. While the overall economy maintains stability at a low growth rate, so-called public servants shake down the citizens at every turn only to redistribute the ill-gotten gains to the cronies who keep them in the position of authority to continue doing it. Shall we dance with the perpitrators, or be wise to a scheme that surely will have a disappointing end?