WEBVTT 00:00:00.000 --> 00:00:02.580 Welcome back to The Deep Dive. Our mission today, 00:00:02.680 --> 00:00:05.960 well, it's a deep dive into uncertainty, specifically 00:00:05.960 --> 00:00:08.539 the economic reality we're all feeling here in 00:00:08.539 --> 00:00:11.240 late 2025. You've probably felt the financial 00:00:11.240 --> 00:00:13.759 squeeze, right? But what are the actual numbers 00:00:13.759 --> 00:00:16.120 telling us about this persistent price pressure? 00:00:16.679 --> 00:00:19.660 And crucially, why is the market reacting, well, 00:00:20.440 --> 00:00:22.899 reacting by pushing the price of good old gold 00:00:22.899 --> 00:00:25.699 near record highs? What's going on there? We're 00:00:25.699 --> 00:00:28.379 diving into independent business research and 00:00:28.379 --> 00:00:30.820 market analysis today, focusing specifically 00:00:30.820 --> 00:00:33.520 on the precious metals angle and financial conditions 00:00:33.520 --> 00:00:37.320 as of well. right now, October 2025. And what 00:00:37.320 --> 00:00:39.759 jumps out immediately is this real tension. You've 00:00:39.759 --> 00:00:41.700 got the Federal Reserve signaling rate cuts, 00:00:41.939 --> 00:00:44.000 suggesting things might ease up. But at the same 00:00:44.000 --> 00:00:45.740 time, you, the consumer, are still dealing with 00:00:45.740 --> 00:00:48.619 pretty stubborn inflation and the market. It's 00:00:48.619 --> 00:00:50.539 responding with that classic flight to safety, 00:00:50.619 --> 00:00:53.119 which in this case means a really significant 00:00:53.119 --> 00:00:55.619 surge in gold prices. OK, let's unpack that tension. 00:00:55.780 --> 00:00:57.820 We need the latest data. I mean, beyond the headlines 00:00:57.820 --> 00:00:59.939 about gas prices jumping around again, let's 00:00:59.939 --> 00:01:01.560 look at the core, the bedrock. What's the latest 00:01:01.560 --> 00:01:04.920 snapshot for U .S. inflation? Sure. So If we 00:01:04.920 --> 00:01:06.959 look at the U .S. Consumer Price Index, that's 00:01:06.959 --> 00:01:10.280 CPI, the main measure, the headline rate as of 00:01:10.280 --> 00:01:14.260 August 2025 was sitting around 2 .9%. 2 .9%, 00:01:14.260 --> 00:01:17.359 okay, not double digits. Exactly. It's not catastrophically 00:01:17.359 --> 00:01:19.640 high on its own, but it's significant because 00:01:19.640 --> 00:01:22.519 it's the highest sustained increase we've seen 00:01:22.519 --> 00:01:25.060 since earlier this year. It shows the pressure 00:01:25.060 --> 00:01:27.760 just isn't really letting up. Right, but the 00:01:27.760 --> 00:01:30.099 Fed often looks past that headline number, doesn't 00:01:30.099 --> 00:01:32.239 it? Because food and energy prices can swing 00:01:32.239 --> 00:01:35.219 so wildly. What about core inflation when you 00:01:35.219 --> 00:01:37.959 strip that volatility out? Ah, yes. And that's 00:01:37.959 --> 00:01:40.280 the figure that, well, policymakers probably 00:01:40.280 --> 00:01:42.760 worry about most. Core inflation, excluding food 00:01:42.760 --> 00:01:45.159 and energy, is still stubbornly high. It's around 00:01:45.159 --> 00:01:48.189 3 .1 percent. 3 .1 % core. OK, so higher than 00:01:48.189 --> 00:01:49.930 the headline. What does that tell us? That 3 00:01:49.930 --> 00:01:52.569 .1 % is a signal, really. It tells us the upward 00:01:52.569 --> 00:01:55.409 pressure isn't just a blip at the gas pump or 00:01:55.409 --> 00:01:57.129 a temporary issue with harvest. It suggests the 00:01:57.129 --> 00:01:59.250 problem is more embedded, maybe in services, 00:01:59.430 --> 00:02:01.769 maybe wages. It's sort of baked into the wider 00:02:01.769 --> 00:02:03.969 economy. It points to more sustained price increases. 00:02:04.409 --> 00:02:07.769 So we have this sustained pressure. What are 00:02:07.769 --> 00:02:09.770 the specific things driving it? It sounds like 00:02:09.770 --> 00:02:12.189 it's more than just leftover pandemic demand 00:02:12.189 --> 00:02:14.150 issues. Oh, it definitely is. It's a complex 00:02:14.150 --> 00:02:17.310 mix, actually. One big structural factor comes 00:02:17.310 --> 00:02:19.909 straight from trade policy. These tariffs that 00:02:19.909 --> 00:02:22.270 have been imposed on various imports, they're 00:02:22.270 --> 00:02:24.530 acting like a kind of quiet tax. They directly 00:02:24.530 --> 00:02:28.870 push up prices on consumer goods, things like... 00:02:28.699 --> 00:02:31.599 clothing, some electronics, transportation -related 00:02:31.599 --> 00:02:34.060 products. So the base cost is higher before it 00:02:34.060 --> 00:02:36.719 even gets to the store shelf? Precisely. Tariffs 00:02:36.719 --> 00:02:39.280 give prices an upward nudge right from the start. 00:02:39.560 --> 00:02:41.719 OK, tariffs are a structural push. What about 00:02:41.719 --> 00:02:44.039 the day -to -day stuff everyone fuels more directly? 00:02:44.439 --> 00:02:46.719 The volatility? Well, on that front, gasoline 00:02:46.719 --> 00:02:49.360 prices have been... Frankly all over the place 00:02:49.360 --> 00:02:51.840 really volatile and that frequently throws the 00:02:51.840 --> 00:02:54.000 overall cost of living out of whack and then 00:02:54.000 --> 00:02:56.219 there are the basics You know supermarket food 00:02:56.219 --> 00:02:59.360 prices just keep climbing that relentless upward 00:02:59.360 --> 00:03:02.400 trend really strains family budgets any relief 00:03:02.400 --> 00:03:04.719 anywhere We did see a little bit of good news 00:03:04.719 --> 00:03:08.539 Rents showed some signs of easing recently But 00:03:08.539 --> 00:03:11.620 honestly that single point of relief hasn't been 00:03:11.620 --> 00:03:13.740 nearly enough to offset the pressure everywhere 00:03:13.740 --> 00:03:16.759 else, especially in essential categories It's 00:03:16.759 --> 00:03:18.780 compounded pressure OK, so this brings us to 00:03:18.780 --> 00:03:20.800 the Federal Reserve. We've got core inflation 00:03:20.800 --> 00:03:23.159 running over 3 percent, yet back in September 00:03:23.159 --> 00:03:25.960 2025, they actually cut interest rates. Doesn't 00:03:25.960 --> 00:03:27.960 that send a bit of a mixed signal, like maybe 00:03:27.960 --> 00:03:30.219 they're prioritizing something else over hitting 00:03:30.219 --> 00:03:32.780 that 2 percent inflation target right now? That's 00:03:32.780 --> 00:03:34.379 exactly the question the market is grappling 00:03:34.379 --> 00:03:36.939 with. Yes, the Fed did respond, citing concerns 00:03:36.939 --> 00:03:39.680 about broader economic softening. They cut the 00:03:39.680 --> 00:03:42.460 federal funds target range down to 4 .00 percent, 00:03:42.620 --> 00:03:45.599 4 .25 percent, and they even projected more rate 00:03:45.599 --> 00:03:48.580 cuts coming, possibly into But their official 00:03:48.580 --> 00:03:51.439 long -term target for inflation is 2 % and they're 00:03:51.439 --> 00:03:53.300 cutting rates when core inflation is clearly 00:03:53.300 --> 00:03:56.300 running hotter at 3 .1%. What's the implication 00:03:56.300 --> 00:03:59.419 of that specific gap, that 1 .1 % difference? 00:03:59.719 --> 00:04:01.919 Well, the implication is that the Fed is caught 00:04:01.919 --> 00:04:04.479 in a really tough balancing act. They're weighing 00:04:04.479 --> 00:04:06.740 the risk of inflation staying too high against 00:04:06.740 --> 00:04:09.259 the risk of maybe tipping the economy into a 00:04:09.259 --> 00:04:12.240 recession. By cutting rates, they're sort of 00:04:12.240 --> 00:04:14.280 implicitly signaling that maybe their bigger 00:04:14.280 --> 00:04:16.779 worry in the near term is keeping economic growth 00:04:16.779 --> 00:04:19.379 stable. It's just proven really, really hard 00:04:19.379 --> 00:04:22.000 to get inflation back down to that 2 % mark. 00:04:22.319 --> 00:04:24.459 And the fact that it's still difficult after 00:04:24.459 --> 00:04:27.319 all this time and policy changes shows you the 00:04:27.319 --> 00:04:28.800 deep challenge they face. They're almost saying, 00:04:29.139 --> 00:04:30.920 look, Maybe we have to live with slightly higher 00:04:30.920 --> 00:04:33.019 inflation for a bit if it avoids a really sharp 00:04:33.019 --> 00:04:35.639 downturn. And while the Fed is juggling these 00:04:35.639 --> 00:04:38.300 big macro risks, you, our listener, are managing 00:04:38.300 --> 00:04:40.639 your own budget. Let's talk about the immediate 00:04:40.639 --> 00:04:43.420 impact of the sustained 3 % pressure. It's that 00:04:43.420 --> 00:04:45.660 constant shrinking of your dollar's value, isn't 00:04:45.660 --> 00:04:48.420 it? It is. It's like an insidious tax on your 00:04:48.420 --> 00:04:51.519 savings and your purchasing power. The research 00:04:51.519 --> 00:04:54.079 gives some very real examples. Over the last 00:04:54.079 --> 00:04:57.589 few years, Essentials like groceries, gas, and 00:04:57.589 --> 00:05:00.170 especially health care costs, they've all become 00:05:00.170 --> 00:05:02.850 noticeably more expensive. Every dollar you hold 00:05:02.850 --> 00:05:05.670 just buys a little bit less. And if your income 00:05:05.670 --> 00:05:08.850 isn't keeping up with 3 % core inflation, well, 00:05:08.930 --> 00:05:11.370 you're effectively getting a pay cut in real 00:05:11.370 --> 00:05:14.110 terms. And it's clear this financial pain isn't 00:05:14.110 --> 00:05:16.730 spread evenly, right? Who's really feeling the 00:05:16.730 --> 00:05:18.769 brunt of this, according to the research? Yeah, 00:05:19.050 --> 00:05:21.930 the strain is definitely felt most acutely by 00:05:21.930 --> 00:05:24.209 lower income households. Their budget structure 00:05:24.209 --> 00:05:26.790 is just different. They spend a much, much larger 00:05:26.790 --> 00:05:28.990 share of their total income on those essentials 00:05:28.990 --> 00:05:31.009 that are seeing the highest inflation, food, 00:05:31.129 --> 00:05:33.990 housing, basic transport. So when those costs 00:05:33.990 --> 00:05:37.050 go up, there's really no cushion. It forces incredibly 00:05:37.050 --> 00:05:39.970 difficult choices between necessities right away. 00:05:40.129 --> 00:05:42.610 Unlike higher income groups. Exactly. Higher 00:05:42.610 --> 00:05:44.829 income groups often have more flexibility. Maybe 00:05:44.829 --> 00:05:47.110 their assets or income streams are less sensitive 00:05:47.110 --> 00:05:49.709 to these immediate price hikes. They might feel 00:05:49.709 --> 00:05:51.949 it, but it's not usually forcing those same kinds 00:05:51.949 --> 00:05:54.870 of tradeoffs. Let's focus specifically on retirees 00:05:54.870 --> 00:05:57.269 for a moment, especially those on fixed incomes. 00:05:57.930 --> 00:06:00.069 Their vulnerability to this kind of persistent 00:06:00.069 --> 00:06:03.910 inflation must be huge. Absolutely. For retirees 00:06:03.910 --> 00:06:07.129 who depend on, say, a fixed pension or savings 00:06:07.129 --> 00:06:09.209 that don't automatically adjust for inflation, 00:06:09.870 --> 00:06:11.709 they face this risk of their living standards 00:06:11.709 --> 00:06:14.670 just gradually eroding over time. And it can 00:06:14.670 --> 00:06:16.790 be significant. Even with things like Social 00:06:16.790 --> 00:06:19.329 Security adjustments. Well, yes, Social Security 00:06:19.329 --> 00:06:21.170 and some government pensions do have cost of 00:06:21.170 --> 00:06:23.649 living adjustments, CLAs, which help offset some 00:06:23.649 --> 00:06:26.470 of it. But many private pensions or fixed income 00:06:26.470 --> 00:06:28.629 retirement plans just don't have that built in 00:06:28.629 --> 00:06:30.889 protection. Their retirement planning was probably 00:06:30.889 --> 00:06:33.529 based on expecting lower, more stable inflation. 00:06:33.949 --> 00:06:36.410 This sustained three percent rate really challenges 00:06:36.410 --> 00:06:38.910 that long term security they plan for. OK, so 00:06:38.910 --> 00:06:41.709 this widespread financial erosion combined with 00:06:41.709 --> 00:06:44.689 the Fed's kind of complex policy response, it 00:06:44.689 --> 00:06:47.319 brings back to the market's reaction. Gold, the 00:06:47.319 --> 00:06:49.639 ancient asset, the classic inflation hedge. Why 00:06:49.639 --> 00:06:52.459 gold? What makes it the go -to safe haven in 00:06:52.459 --> 00:06:54.699 times like these? Gold's traditional role is 00:06:54.699 --> 00:06:57.180 pretty straightforward really. It's seen as a 00:06:57.180 --> 00:07:00.639 reliable store of value when confidence in fiat 00:07:00.639 --> 00:07:03.310 currency You know, regular government issued 00:07:03.310 --> 00:07:06.029 money like the dollar starts to fade. When the 00:07:06.029 --> 00:07:07.750 purchasing power of your dollar is shrinking 00:07:07.750 --> 00:07:10.470 by three percent every year, some investors naturally 00:07:10.470 --> 00:07:12.870 turn to tangible assets, things they can hold, 00:07:12.930 --> 00:07:15.089 things that aren't just paper promises to try 00:07:15.089 --> 00:07:17.490 and preserve their wealth. Gold basically acts 00:07:17.490 --> 00:07:20.670 as a kind of barometer for distrust in currency 00:07:20.670 --> 00:07:22.850 stability. But hang on. Some people argue gold 00:07:22.850 --> 00:07:25.189 is just another volatile asset now, maybe like 00:07:25.189 --> 00:07:28.680 crypto, given how much its price can swing. Why 00:07:28.680 --> 00:07:30.740 do the sources still treat it as this primary 00:07:30.740 --> 00:07:33.139 hedge against inflation? That's a fair point. 00:07:33.220 --> 00:07:35.500 It certainly shows volatility. But the sources 00:07:35.500 --> 00:07:37.740 we looked at stress that its recent big climb 00:07:37.740 --> 00:07:40.160 seems fundamentally rooted in genuine hedging 00:07:40.160 --> 00:07:42.639 demand, not just pure speculation. And the most 00:07:42.639 --> 00:07:44.939 dramatic data point really backs this up. In 00:07:44.939 --> 00:07:48.500 early October 2025, just recently, gold prices 00:07:48.500 --> 00:07:50.899 hit near record highs. They're approaching a 00:07:50.899 --> 00:07:52.959 really staggering four thousand dollars an ounce. 00:07:53.240 --> 00:07:56.670 That kind of valuation suggests a deep. broad 00:07:56.670 --> 00:08:00.389 market consensus, a belief that current financial 00:08:00.389 --> 00:08:03.709 conditions, specifically this mix of high inflation 00:08:03.709 --> 00:08:07.490 plus loosening monetary policy, justify a massive 00:08:07.490 --> 00:08:10.769 shift into non -fiat assets. Approaching $4 ,000 00:08:10.769 --> 00:08:13.730 an ounce. That's huge. What specific factors 00:08:13.730 --> 00:08:15.689 are pushing it that high right now? It can't 00:08:15.689 --> 00:08:18.589 just be the 2 .9 per CCPI number alone. No, you're 00:08:18.589 --> 00:08:20.610 right. It's really a convergence of several major 00:08:20.610 --> 00:08:23.230 drivers. First, absolutely the sustained inflation 00:08:23.230 --> 00:08:25.189 we've been talking about. That's key. Second, 00:08:25.250 --> 00:08:27.529 the Federal Reserve's policy moves. The rate 00:08:27.529 --> 00:08:30.269 cuts implicitly signal they might tolerate higher 00:08:30.269 --> 00:08:32.509 inflation, which tends to weaken the dollar and 00:08:32.509 --> 00:08:34.889 make gold more attractive. And third, and this 00:08:34.889 --> 00:08:36.730 is critical, there's just a lot of generalized 00:08:36.730 --> 00:08:39.250 uncertainty out there. Global economic worries, 00:08:39.490 --> 00:08:42.600 geopolitical tensions, all that creates a significant 00:08:42.600 --> 00:08:45.159 risk premium that gets baked into the gold price. 00:08:45.840 --> 00:08:48.000 Investors are essentially buying stability or 00:08:48.000 --> 00:08:50.039 perceive stability, and they're willing to pay 00:08:50.039 --> 00:08:52.539 a very high price for it right now. And how does 00:08:52.539 --> 00:08:54.820 gold performance stack up against other traditional 00:08:54.820 --> 00:08:57.000 assets in this environment, like stocks and bonds? 00:08:57.440 --> 00:08:59.700 Well, we're seeing increased volatility pretty 00:08:59.700 --> 00:09:02.080 much everywhere else. Bonds tend to suffer because 00:09:02.080 --> 00:09:04.379 inflation eats away at the value of those future 00:09:04.379 --> 00:09:07.500 fixed payments, making them less appealing. Stocks 00:09:07.500 --> 00:09:09.740 face headwinds too, rising costs for companies. 00:09:09.950 --> 00:09:12.590 potentially tighter budgets for consumers impacting 00:09:12.590 --> 00:09:16.110 sales. Gold, on the other hand, often gains appeal 00:09:16.110 --> 00:09:19.049 as a diversifier, precisely because its value 00:09:19.049 --> 00:09:21.529 isn't directly tied to corporate profits or government 00:09:21.529 --> 00:09:24.409 debt in the same way. It's seen as a more fundamental 00:09:24.409 --> 00:09:27.320 hedge against broader financial stress. Let's 00:09:27.320 --> 00:09:29.840 loop back quickly and connect that trade policy 00:09:29.840 --> 00:09:31.759 point directly to the prices people are seeing. 00:09:32.139 --> 00:09:34.000 You mentioned tariffs earlier as a structural 00:09:34.000 --> 00:09:36.200 driver. Can you flesh that out a bit more? How 00:09:36.200 --> 00:09:38.980 does that specific policy feed into that stubborn 00:09:38.980 --> 00:09:42.399 core inflation? Sure. Those tariffs on a whole 00:09:42.399 --> 00:09:45.240 range of imported goods, they act as an ongoing 00:09:45.240 --> 00:09:47.720 cost pusher. It's not a one -off shock. It's 00:09:47.720 --> 00:09:50.159 a persistent policy choice that raises the cost 00:09:50.159 --> 00:09:53.120 of inputs and finished products day after day. 00:09:53.620 --> 00:09:56.120 The sources specifically highlight how this contributes 00:09:56.120 --> 00:09:58.840 directly to price increases in categories like 00:09:58.840 --> 00:10:01.419 clothing, electronics, and transportation -related 00:10:01.419 --> 00:10:03.879 products. And these are all things that feed 00:10:03.879 --> 00:10:07.539 straight into that sticky 3 .1 % core CPI figure 00:10:07.539 --> 00:10:10.460 we discussed. So in a way, it's an inflationary 00:10:10.460 --> 00:10:12.220 pressure that policymakers kind of layered on 00:10:12.220 --> 00:10:14.690 themselves. Okay. So we've got entrenched inflation, 00:10:14.870 --> 00:10:17.649 Fed cutting rates anyway, and gold prices signaling 00:10:17.649 --> 00:10:20.889 some serious economic anxiety. What's the official 00:10:20.889 --> 00:10:22.889 forecast then? What are policymakers telling 00:10:22.889 --> 00:10:25.409 you, the listener, to expect moving forward? 00:10:25.990 --> 00:10:28.690 The official economic projections, the consensus 00:10:28.690 --> 00:10:31.389 view from policymakers, generally suggest a path 00:10:31.389 --> 00:10:34.429 of moderate economic growth. And alongside that, 00:10:34.870 --> 00:10:37.029 a gradual easing of inflation over the next several 00:10:37.029 --> 00:10:38.929 years. That's the base case they seem to be operating 00:10:38.929 --> 00:10:41.009 under. They expect these pressures to slowly 00:10:41.009 --> 00:10:43.690 fade. But expectations aren't guarantees, right? 00:10:44.049 --> 00:10:46.470 What risks are market watchers still keeping 00:10:46.470 --> 00:10:49.190 a close eye on? Things that could derail that 00:10:49.190 --> 00:10:51.850 moderate projection? Absolutely. Vigilance is 00:10:51.850 --> 00:10:54.590 key. Market participants and policymakers are 00:10:54.590 --> 00:10:56.950 particularly watching out for two major risks 00:10:56.950 --> 00:10:59.710 that could really change the picture. First, 00:11:00.110 --> 00:11:02.230 any potential new supply chain disruptions. We 00:11:02.230 --> 00:11:04.350 saw how damaging those were before. They could 00:11:04.350 --> 00:11:06.990 quickly hike goods prices again. Second, any 00:11:06.990 --> 00:11:09.639 unexpected shifts in consumer demand. If demand 00:11:09.639 --> 00:11:12.179 suddenly surges in certain areas, it could accelerate 00:11:12.179 --> 00:11:14.799 price growth faster than the Fed can react. Those 00:11:14.799 --> 00:11:16.580 are the kind of potential triggers for inflation 00:11:16.580 --> 00:11:18.789 spiking again. OK, so let's try to summarize 00:11:18.789 --> 00:11:21.149 the core findings from this deep dive for you 00:11:21.149 --> 00:11:23.669 listening. Inflation is proving persistent. We're 00:11:23.669 --> 00:11:26.289 seeing a 2 .9 percent headline rate, but maybe 00:11:26.289 --> 00:11:29.090 more importantly, a stubborn 3 .1 percent core 00:11:29.090 --> 00:11:31.549 rate. This seems driven by structural costs, 00:11:31.570 --> 00:11:33.950 things like tariffs, but also energy volatility. 00:11:34.350 --> 00:11:36.409 And this relentless pressure is eroding your 00:11:36.409 --> 00:11:38.710 purchasing power, hitting lower income households 00:11:38.710 --> 00:11:41.730 and retirees on fixed incomes the hardest. And 00:11:41.730 --> 00:11:43.870 critically, the market's reaction to all this 00:11:43.870 --> 00:11:46.070 uncertainty, especially this unusual combination 00:11:46.070 --> 00:11:49.009 of sticky core inflation and Fed rate cuts has 00:11:49.009 --> 00:11:52.730 sent gold soaring towards $4 ,000 an ounce. These 00:11:52.730 --> 00:11:54.590 developments really underscore why keeping a 00:11:54.590 --> 00:11:57.250 close eye on those inflation indicators and what 00:11:57.250 --> 00:11:59.750 the central banks are doing is just so essential 00:11:59.750 --> 00:12:02.090 for thinking about long -term financial stability. 00:12:02.700 --> 00:12:04.720 So here's a final thought to leave you with. 00:12:04.940 --> 00:12:06.700 If that traditional relationship really holds 00:12:06.700 --> 00:12:09.799 true that gold acts as a direct response to weakening 00:12:09.799 --> 00:12:13.220 currency to diminishing purchasing power, then 00:12:13.220 --> 00:12:15.740 what does that $4 ,000 per ounce price point 00:12:15.740 --> 00:12:18.340 truly signal about the Marriott's deep long -term 00:12:18.340 --> 00:12:20.500 confidence in the fundamental value of the dollar? 00:12:21.019 --> 00:12:22.820 It raises a pretty important question for you 00:12:22.820 --> 00:12:24.659 to consider, especially as you watch the next 00:12:24.659 --> 00:12:26.879 inflation numbers roll in and as this debate 00:12:26.879 --> 00:12:28.879 continues over whether that gold price reflects 00:12:28.879 --> 00:12:31.759 a smart hedge or maybe just hysteria.