Had a long conversation with a portfolio manager based in Scottsdale, Arizona. He reports that personal costs in the US are getting out of control, and he doesn't understand how the general public are going to find the extra money.
In 2007 his property taxes will be going up 42%
He's just received a letter from the Arizona Public Service who are asking for another 20% rate increase due to natural gas costs
His health insurance costs are up by 23%
University costs for one of his children are now hitting nearly $30k a year
All in all the price rises are going to cost him an extra $5,000+ a year
As he put it, the govt is going to have to continue to print more and more money just to keep the growth from going negative.
Deflation therefore is NOT an option.
No wonder Gold & Silver stocks haven't gone down by as much as many expected after gold was slammed a month or so back. In fact, many of the junior mining stocks broke out to new highs last week.
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