Hey There Income Hunter,

 

Even I – someone who has been extremely bullish on inflation – did not think PPI would come in so much higher than expectations. 

 

I mean, a full percent in January and 9.7% year-over-year!

 

And we may not be done.

 

 

Higher inflation and lower growth make the Fed’s job about as difficult as it can get.

 

Where this now puts the central bank in terms of monetary policy is disturbing

 

Today I will clearly spell out for you how serious this predicament really is so you can protect yourself and your family – while also capitalizing on the Fed’s hidden agenda. 

 

There’s no time to waste.

 

How we Got Here

 

– Since Covid hit the US government and the Fed stimulated people, companies and state and local governments with massive amounts of money and credit …

 

• • • Americans were told the money printing WOULD NOT create a lot of inflation and now most people are surprised at how high inflation is. I saw this coming and want to help you understand why it happened.

 

– Investors are slowly transitioning to the new reality that in order to measure your wealth accurately, you must measure money and wealth in “real” terms. Real wealth is the rate of inflation (CPI at 7.5%) from the returns on your wealth, which most likely means your wealth is deteriorating significantly. 

 

– The government, via the Fed, must now decide to:

 

• • • Let interest rates rise to the point that they crush the economy. That would reduce spending and demand for credit – and lower inflation
    • Print more money and do enough QE to absorb all the bonds for sale and keep rates low. That would cheapen the value of money and raise inflation.

 

– The Lesson learned is that money and credit do not automatically create more wealth, especially in the government’s case, where a massive debt burden has created a situation in which a new dollar created does not generate more growth.

 

– Key rule to remember: When massive amounts of currency are created relative to demand, the currency declines in value (monetary inflation). Plus the government directs the new money to places that will buy votes, which may not generate real economic growth. 

 

– So, all this excess money is used in a very inefficient way and it only creates calculated wealth based on asset price inflation, not real wealth. Money creation is stimulative when given out and depressing when it must be paid back. 

 

– Another lesson learned is that we can’t rely on our government to protect us financially. It will always take advantage of its ability to create new money out of thin air. 

 

Why? Because no policy maker is responsible for the entire long-term debt cycle, so they’re happy to leave the debt burden to the next guy in office. 

 

– Key Rule #2: Governments always opt to print a lot of money and buy back most of the debt, which was issued to account for the money created. This cheapens the money and debt. When holders of dollars and bonds realize this, they sell their debt and exchange dollars for real assets.

 

– This is where the US is in it’s long-term debt cycle. Monetary inflation is the longer-term hidden agenda to devalue dollars and bonds to reduce government debt.  

 

What do Currencies Devalue Against?

 

When the creation of money sufficiently hurts the returns on debt and debt assets (bonds), it drives money out of the assets and into long-term inflation-hedge assets like gold, commodities, inflation-indexed bonds, and other currencies (including digital). 

 

This brings us back to the choice the Gov’t has …

 

Allow real rates – meaning the rate of interest minus the rate of inflation – to rise to reduce inflation but crush the economy … OR prevent real interest rates from rising by printing more money and buying up all the debt and debt assets to hold interest rates artificially low. 

 

In Conclusion

 

We know the Biden administration will never allow the Fed to crush the economy so we must trade under the assumption that the government will demand a couple of token rate hikes before allowing the Fed to go back to printing to do QE and buy up the debt issued to support more printing. 

 

Bring It Home

 

Today was a great opportunity to reassess the current situation so you don’t get sidetracked away from the market’s macro drivers. They will continue to dictate central bank policy.

 

The bottom line is, I want to do everything I can to help you preserve your wealth and stack profits trading so you can build generational “real” wealth. 

 

And that’s why I invite you to join the Power Income Trader as we beat the Fed at their own game. 

 

You need to own the “anti” dollar, which can be done simply by expanding your trading universe to include alternative markets.

 

In addition to multiple trades each week, Power Income Trader members receive a tremendous amount of insight on government and Fed policy that directly impacts the markets. That comes in the form of weekly live events, plus exclusive reports and analysis.

 

The next few months will be critical as the Fed reverts back to printing and taking inflation to double digits. You do not want to miss out on the opportunities that event will generate.

 

Live and Trade With Passion My Friend,

 

Griff