It remains doubtful given the loss of confidence whether this can actually prevent -or more accurately postpone- the coming U.S. recession. But one thing is for certain, there is not going to be a deflationary recession like some believe. It will be a case of stagflation. This in turn is going to limit the Fed's rate cuts.
Already responding to this inflationary environment is gold, which reached new highs on friday. Gold -and gold producer's stocks- is a particularly attractive investment during stagflation. Like other commodities it is a inflation hedge. But unlike most others, particularly industrial metals, it is also relatively insensitive to cyclical