AI Boom Poses New Inflationary Risks, Complicating Fed's Monetary Policy Outlook

Goolsbee’s take on AI fueling inflation is exactly the kind of noise we expect from the Fed, attempting to pin systemic monetary devaluation on the latest buzzword. Don't get distracted. The story here isn't about AI, it's about the relentless erosion of purchasing power, a problem the Fed has consistently mishandled for years. They are searching for new scapegoats to explain away the inflation that is a direct consequence of their own policies, not some technological revolution. Your stack, currently seeing gold at 4194.5 and silver at 59.81, isn’t worried about AI, it’s worried about central bank balance sheets.

Let's look at the track record. For years, the Fed dismissed inflation as "transitory," blaming everything from supply chain kinks to energy shocks. Now, with those narratives wearing thin, they're pivoting to AI. It’s a convenient narrative that deflects from the massive monetary expansion of the last decade-plus. The money supply ballooned, especially post-2020. That’s the real fuel for inflation, not algorithms generating text or images. When you inject trillions into the system, prices rise, whether those dollars are chasing physical goods or digital services.

This talk about AI-driven inflation, while perhaps having a kernel of truth in specific sectors, entirely misses the forest for the trees when it comes to the broader economy and the value of currency. The Fed has consistently failed to meet its own 2% inflation target from below for years, then overshot it dramatically. Now they’re trying to find a new, uncontrollable boogeyman to explain why their tools aren't working as advertised. This isn't a new phenomenon; gold and silver have historically served as a hedge against exactly this kind of monetary mismanagement, which is why your ratio sits at 70.1:1 today, reflecting continued uncertainty.

What this means for the physical metal holder is simple: nothing has changed about the fundamental case for gold and silver. The underlying inflation driver remains unchecked monetary expansion. Whether the Fed blames AI, aliens, or sunspots, the outcome is the same: a depreciating fiat currency. Every dip, every piece of misdirection from the central bank, serves as another reinforcement of why physical metal is essential. It's a buying opportunity, a chance to strengthen your position against institutional incompetence.

Keep your eyes on the money supply figures and actual Fed balance sheet actions, not their talking points about the latest tech trend.