Will the Inflation Grinch Steal Christmas?

PNC says its index is similar to the Consumer Price Index, which is produced by the U.S. Bureau of Labor Statistics and measures price changes in goods and services, but the Christmas Price Index represents a better picture of inflation for consumers. PNC’s 4.8 percent gain in prices easily outpaces the government’s price index, which stands at only 2.2 percent for the past 12 months through September.

PNC even has a core index that removes volatile swan pricing that is still higher than the government’s core index that removes food and energy prices. Consumers doing their own shopping will likely agree that a 2.2 percent inflation rate from the BLS belongs in fantasy land.

While one of the worst droughts on record can be used to explain away a jump in pear tree prices, weather can not be used to explain the strong increase in gold prices. The precious metal has gained more than 10 percent this year, as central banks continue to debase fiat currencies through quantitative easing programs. In the U.S. alone, the Federal Reserve has launched QE1, QE2, Operation Twist and QE-infinity, which contains no set time limit. The Fed has expanded its balance sheet from around $900 billion in 2008 to nearly $3 trillion Tuesday. Quantitative Easing by the four major central banks over the past four years totals an astounding $6 trillion, according to IceCap Asset Management and Goldman Sachs Global Economics. That’s enough to worry even Santa Claus.

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Disclosure: Long EXK, AG, HL, PHYS