America's Gold Authority Podcast
Are you curious about owning physical gold, silver, and other precious metals? America's Gold Authority® Podcast, presented by U.S. Money Reserve, provides information and insights into these tangible assets, exploring their role in preserving wealth and navigating market fluctuations. The experts at U.S. Money Reserve identify and break down key factors influencing gold and precious metal pricing, portfolio strategies, and how to securely acquire and store physical metals. Learn how gold and silver can play a crucial role in portfolio diversification and serve as wealth insurance during times of economic uncertainty. Stay informed with industry-leading analysis, market trends, and insider knowledge from U.S. Money Reserve’s team of trusted authorities, which includes two former Directors of the U.S. Mint, an 18-year veteran in financial and retirement planning education, and seasoned precious-metals professionals.
America's Gold Authority Podcast
Through the Inflation Storm: Gold, Energy Markets, and the Fed
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
On this episode of America’s Gold Authority® Podcast, host Mike Barnes is joined by Philip N. Diehl, President of U.S. Money Reserve and former Director of the U.S. Mint, and Brad Chastain, U.S. Money Reserve’s Managing Director and Global Head of Research, to break down the latest inflation surge and the growing pressures facing the global economy.
They examine why inflation numbers came in higher than expected, how rising oil prices and supply disruptions are feeding into the broader cost of living, and why older Americans may be feeling the impact even more sharply. The discussion highlights how energy shortages, fertilizer costs, and global shipping disruptions could continue driving inflation higher in the months ahead.
Diehl and Chastain also explore the difficult position facing the Federal Reserve as it weighs inflation risks against slowing economic growth. With the possibility of prolonged supply shocks tied to conflict in the Persian Gulf and ongoing trade tensions, the episode explains why rate cuts may become harder to justify despite mounting economic pressure.
The conversation also examines gold’s evolving role in modern portfolios. While traditional stock-and-bond diversification models have weakened in recent years, gold has increasingly demonstrated its ability to provide stability during periods of inflation, financial stress, and rising rates.
U.S. Money Reserve is widely known as one of the country’s largest private dealers of government-minted gold, silver, platinum, and palladium. It’s the only precious metals firm guided by two former U.S. Mint Directors, giving the company unrivaled institutional insight. Having served more than one million customers and processed over $4.4 billion in transactions, U.S. Money Reserve is widely trusted for helping Americans safeguard their financial future. Tune in to America’s Gold Authority® Podcast and request your FREE Gold Ownership Guide by calling 855-243-0896 or visiting https://usmr.gold/USMoneyReserve/POD62P
The views expressed in this video are those of the panelists and do not necessarily reflect the views of U.S. Money Reserve.
SPEAKER_02Welcome to America's Gold Authority Podcast. My name is Mike Barnes. The latest inflation numbers are out, and they were higher than the Federal Reserve expected. What does that mean for us? What does that mean for the price of gold? Let's bring in a couple of experts and find out. Brad Chastain and Philip Deal join me now. And Brad, I want to start with you with all the number crunching you do, all the research that you do for U.S. Money Reserve, tell us what these numbers mean to all of us around the country.
SPEAKER_03Yeah, the inflation rate is just how we measure the change in prices of goods and services that we purchase. So it's the way that we measure the rising cost of living, if you will. So the the headline number came in quite a bit higher than expected and higher than what the Federal Reserve would certainly like to see, trying to keep at least the core that excludes food and injury closer to 2% is their goal. That came in at 2.8%, and then headline number that includes those came in at 3.8. So that means that on average, basket of goods services costs 3.8% more than it did last year. There are different ways to measure inflation as well. Another measure that is particularly of interest to older Americans, at least 62 and older, is the CPIE. And that actually came in at an even higher rate at 4.1%. So the way that it just simply measures the difference in how older Americans tend to spend their money versus the general population. So things like healthcare and housing are weighted a little bit more heavily. So we see older Americans actually taking a bigger inflation hit than the general public, which is a really important factor for older folks to consider when they think about living on a fixed income and how to prepare for that.
SPEAKER_02The numbers are definitely higher than most people expected, but I found it interesting that one very popular, very large internet news set called the report, quote, devastating. Phil Deal, 35th Director of the United States meant president of U.S. Money Reserve, is devastating too big of a word? Is that true?
SPEAKER_01No, I don't think it's too big of a word. They are living paycheck to paycheck. And um and this is not a welcome development for them. And this is a very significant portion of the American public. So for individuals in that kind of a situation, this is devastating. Now, in terms of the nation as a whole, I'd say what's devastating is the turn here and the turn and the trend. We had been making progress toward the Federal Reserve's goal of a 2% inflation rate, and that kind of seems high in recent historical perspective. We went for years where the Federal Reserve struggled to get inflation rates back up to 2%. And now not only is it struggling to get it to 2%, but now it's turned around and is headed in the wrong direction. And I think this trend is likely to continue for several reasons. The tariffs are still having an effect, and there are new threats coming from the White House to impose tariffs on our competitors and our allies alike if they don't comply with uh what uh the U.S. is requiring of them. Also, we have, of course, the rising oil prices due to the uh blockades of the Persian Gulf. And it's not just oil prices, it's fertilizer prices. Uh the impact of rising, significantly rising fertilizer prices haven't been felt in the market yet, but they're getting ready to be because they're going to have a big impact on food production costs and food prices at the grocery store. And there are other ways in which there are um are primary and secondary impacts of these rises that are going to flow down over the next several months and end up at uh that with Americans paying the price for it. So we're constantly reminded of this by, you know, if you drive and you pay attention, you see the prices rise on a daily basis almost at gasoline stations. And if you go buy milk or or uh other products at the grocery stores, you're well aware of these changes.
SPEAKER_02Hearing all these things that are going to go up, it sounds like the next few months could be a little bit devastating or at least dangerous. Brad, what do you expect the Federal Reserve to do to try to change things?
SPEAKER_03Yeah, that's a good question. I don't think the uh rate cuts are likely on the table that uh many in Washington were hoping for. That's putting the Federal Reserve definitely in a uh precarious situation if they're trying to cut rates into these rising prices. So, and I do think we'll likely see it for the foreseeable future at least, because realistically, I mean, these were April's numbers. Um the you know, the ships leaving the strait over there, you know, on average are taking what six, eight, six weeks, six, eight weeks to get to places like the United States. And so you've got to realize that by the time the ships left at the very end of February, early March, when it when it was really uh closed, those ships were still arriving for quite some time. And then you only caught a little bit of that supply disruption in this number uh realistically. And and even if it opens today, you know, it's six weeks before ships arrive again, even if they start shipping today. So it's gonna be something that we're gonna be feeling for at least the next couple months for sure with this sort of supply shock.
SPEAKER_01Yeah, we're we're in a sort of remarkable situation here where there's this big lag time between the shutting of the strait and the really big realistic impact on uh oil and gas markets. And the reason for that is as Brad explained, there was a lot of oil on the water already being shipped by the time the straits closed. And part of the reason for that is that uh the Persian Gulf nations saw the tensions ramping up, they had been for months, and anticipated the possibility of trouble. Not necessarily the closing of the straits, which is a worst case, but they wanted to get as much oil on the water as they could. The other thing that has happened that is that has insulated the world to a degree, especially the United States, from rising oil prices, is the release of strategic oil preserve reserves uh all over the world, the coordinated release. And just recently the U.S. uh released, I think, another 87 million barrels, if I recall correctly. And that has had an impact on keeping prices down as well. And all of those measures are coming to an end now. Um, and we're not seeing any progress toward a settlement. And as Brad said, even if there were a settlement today, it would take months before uh supplies begin to get back to refineries and then back to consumers. So yeah, we're headed for a period of rising inflation just due to oil prices alone.
SPEAKER_02Philip, I know you've been crunching the numbers about inflation over the years. And is it kind of a glasses half full, glasses half empty type of thing? Because yes, the numbers seem to be bad now, but it's nothing compared to how high it was back in June of 2022.
SPEAKER_01Yeah, that's that's right. Um in uh well, and uh really when you look back uh even further to the oil crisis, uh then the the it was much worse. Inflation, I think, got up to 17 or 18 percent and extended over the course of years. The inflation spike that we saw in 2022 got up to uh just over 9%, so about half of what it was uh 40 years earlier. But um also uh the inflation spike happened over a much shorter period of time and came down rapidly. And so, in a matter of a few months, it wasn't that long before the inflation rate had fallen from that 9 plus percent and was beginning to approach 2.5 percent, so not that far above the target of the Federal Reserve of 2%. And now we've lost ground from there. And I think that's really the concern was it did not allow inflation expectations to take root in the marketplace. And that is really what makes inflation very hard to beat. And that's what we discovered 45 years ago in the 1980s, was it really took a hard hit to uh get inflation rates down.
SPEAKER_02Brad, when I look at what inflation has done just since 2022 coming down and seeing the price of gold going up, is there a correlation there?
SPEAKER_03Yeah, so it's kind of funny because there's actually not technically, from the statistical sense, a correlation, but there is a relationship. Like you can never really look at what is inflation doing at this moment and then make a guess on what gold should be doing at that same exact moment. Um, there was a stronger relationship directly like that with gold and inflation uh coming out of Bretton Woods in the 70s, all the way up into the late 90s is where that relationship really broke. In the late 90s, around 97, treasury inflation protected securities came into existence. So a lot of hedge funds and things started using those as a direct um inflation hedge. And then uh that's also when the Federal Reserve started unofficially, they hadn't announced it yet, but doing what the rest of the world had already been doing, which is targeting a 2% uh rate. They started running their policy that way, even though it wasn't an official policy at that point in time. And at that point, you actually saw that break for that really strong relationship, you know, in the shorter term. And since then, gold has actually greatly outpaced inflation uh since then as a result of that breaking. But there's no doubt that there is a still a longer term relationship, but not just day-to-day week to week.
SPEAKER_02Philip, do you think that if the peace talks continue and are more solidified in Iran, that not only will it help inflation, but also help the price of gold?
SPEAKER_01Uh it will eventually help the price. If a if a real um peace agreement is reached, and I mean not one that is face-saving for one or both of the parties. And I think it's going to be very hard to reach a peace agreement given where the parties are, and also given the political dynamics that they each face, it's very tough to see where we get to a real resolution. And a real resolution that we're talking about here, one that has an impact on uh on inflation and oil prices, is one that opens the Straits of Hormuz. And that is really a tough one right there. Um the Iranians, as much as of a beating as they have taken, their economy, their infrastructure, the nation, their people, as much of a beating as they've taken. By any traditional measure, you would say they've lost the war. Uh, but they're in a much stronger position today than they were before the war, because before the war, the Strait of Hormuz was uh international water with free transit. And now uh the Iranians are really in control there. They and if that continues, they're going to uh they're they're in a position to discriminate uh among nations in the shipping of uh goods out of the Persian Gulf. They'll be in a position to charge for transit through the Gulf. And one of the nasty consequences of that is that there are a number of other straits around the world where there are major shipping straits. And if this precedent begins to spread around the world, then that could really interfere with international trade and increase the cost of goods that we all that we all buy.
SPEAKER_02Philip, you already had me worried about this summer, but now I'm looking longer term. So, Brad, as I hear this about oil, as I hear this about fertilizer, which is going to affect the cost of goods as far as food and such, how long is this gonna last and how much will inflation continue to arise?
SPEAKER_03Yeah, it's hard to know exactly how much, um, but yeah, the that's you know, you don't you can you can sort of drill uh a little bit quicker and and increase output a little bit faster than you can crop production at least. Uh those are planted only seasonally, and obviously it takes a long time for a crop to become harvestable. So if you know if there are supply shortages in the fertilizer through this and prices rise on that, um that's that's those are crops that are likely going to be, you know, eight, 10, 12 months down the road. So definitely can feel that one for a long time. And we don't even know as far as where oil is going to land because everybody, when they look at the price of oil and say it's you know $100, $101 or whatever it is right this particular moment, um, that's actually a futures price. And the futures prices are clearly seem to be predicting that there will be some kind of resolution to this. So oil prices really have not actually priced in a you know much, much longer term uh shutdown. And so that could be a rude awakening if it does continue, at least in prices, that could be a rude awakening if it continues longer than the markets are expecting.
SPEAKER_02These are numbers that we can't control, but what we can control is our money, our savings, our retirement funds. Philip, I want to start with you with our final question is what do we need to do over these next several months and and beyond to change things because of inflation and what's coming up?
SPEAKER_01There are two very strong correlations, or at least coincidences, that we've seen over hundreds of years, but uh especially over the last hundred years. We have seen gold respond very strongly to recessions and financial crises, for example, very strongly. And we've also seen gold respond well to Federal Reserve policy making to fight inflation. When the Federal Reserve begins raising the federal funds rate, we have seen uh gold prices in uh the last uh 20 years or so really respond as an act as a hedge in both cases of moving upward while stock prices go down. And today we have an unusual situation, two unusual situations that reinforce the importance of gold in a portfolio. And one is the competition for as a hedge for gold in the past has been US bonds. And that uh relationship has broken down. Like a lot of other relationships that were good rules of thumb in the past no longer apply. And gold has become the outstanding hedge in hard times and in many cases are displacing gold. And an example of that, we go back to this over and over of Mike Wilson's the CIO of Morgan Stanley last fall, recommending that uh people move from a 60-40 allocation, 60% stocks, 40% bonds, to a 60-20-20, moving 20% of the bonds into gold. So that's really an indication of how gold has strengthened as a hedge. Uh the second thing that is that is happening is that we've seen very clearly, not just in recent years, but over the last 25-26 years, that gold performs better than stocks over the long period of time, in good whether it's good times or bad times, and we've had both in multiple occasions over the last 25 years, and yet gold beats stocks and bonds. So I think those are just powerful reasons why people should be adding to their portfolios. The average portfolio here in the U.S. holds about 2.8% of the portfolio in gold. Really, those averages should be 15 or 20%, something in that neighborhood. So I think it's really a powerful argument for adding gold.
SPEAKER_03You know, the true we've talked about this before, but the traditional stock bond portfolio that we have, you know, grown to, so many have grown to trust over the last 40, 45 years. That's not the world we we live in. I mean, that we've talked about it before. That was an era of falling inflation and falling rates. And that really ultimately helped those uh that that relationship with stocks and bonds provide that um diversification. You know, now we don't have falling rates. We see rates going back up, we see rising inflation, it's a very different, uh, different environment. And uh last time we saw this, I mean think about 2022, right? Um when rates were being raised to to stamp out the higher inflation. And um, you know, stocks and bonds or bonds did not provide protection for stocks during that. They were both down in the high uh teens, uh, both stocks and bonds. Whereas gold held its own. It was basically flat that year in the face of rising rates. And to Phillips' point, the old add is real rates, when real rates are rising, gold tends to move in the other direction. That link has been broken for uh a while now, and 2022 is a great example of that with rising rates. Gold helped protect a portion of that portfolio. If somebody had that, so I imagine a lot of folks wish they had that 60 2020 that Mike Wilson uh recommends back in 2022 versus today.
SPEAKER_02Inflation numbers are definitely affecting us, but now we hear from the two of you that there are things we can do to protect our money. Philip Deal and Brad Chest saying, thanks so much for joining me today. Thanks, Mike. Thank you, Mike. That's all the time we have for today's episode. On behalf of all of us here in the U.S. Money Reserve Studios, thank you for tuning in. If you have any questions or want to learn more about today's episode, you can call the number in our episode description and speak with one of our friendly accounting executives. They'll be more than happy to answer any questions you may have about precious metals and the strategic role they can play in achieving a secure and comfortable financial future. I'm Mike Barnes. We'll see you next time on America's Gold Authority Podcast.
SPEAKER_00The markets for coins are unregulated. Prices can rise or fall and carry some risks. The company is not affiliated with the U.S. government or the U.S. Mint. Past performance of the coin or the market cannot predict future performance. All calls recorded for quality assurance. Offer void where prohibited.