Hey There Income Hunters,
What a week for inflation and real assets.
But we’re just through the first inning of a nine-inning inflation ball game.
The first inning ended with inflation hitting a 40-year high from back when we had a “serious” problem.
Now we’re entering a new stage.
You see, history says that if a central bank allows inflation to go to 6% then it goes to 8%+ pretty quickly.
If you let the inflation genie out of the bottle it is very hard to get her back in.
Not many people realize that in the early 90s, the Fed changed the way inflation is calculated to make it appear CPI is lower than reality.
Today, I’ll show you where CPI would be if it was calculated the way it was meant to be.
Now about the Fed’s CPI lie …
The CPI chart below shows a calculation for inflation today (red). The alternate (blue) calculation was used in 1980.
Official CPI is Another Fed Lie.
The shift in the calculation was done to depress reported inflation.
The Fed purposefully moved CPI away from being a measure of the cost of living needed to maintain a constant standard of living.
This is a very big deal if you think about it because many compensation payments are increased by the official Fed CPI calculation … but in reality the rising cost of essential goods is much higher.
Check out the shelter component of CPI and how far below reality it is ..
Even with a lag, there is no way reported CPI is that far below the actual home rental market.
The recent CPIO report showed New York and New Jersey owner’s equivalent rent for October increasing by only 1.5%.
That is an absolute lie.
Real estate is booming and the rental market has never been hotter.
The official Fed inflation data is deliberate fraud.
The markets trade off it like it is real, but come on. It’s so obvious, to me anyway, what the Fed is doing, but all other agencies protect them because if the truth got out the markets would collapse.
What You have to Look Forward To
The graph below illustrates the ratio of the commodity index to the S&P 500. Think about how much commodities have outperformed this year and yet they have barely gotten off the mat.
Like I said we have 8 innings left in the inflation game. Keep adding to an inflation portfolio on dips.
Bring It Home
The next stage of inflation will be the realization that the Fed is limited in what it can do to fight the “I-word.”
Once that happens we will see trillions of dollars reallocated out of stocks and bonds into real assets.
Now commodities are more volatile than stocks, so you will see shifts along the way.
That is why you should join my new Power Income Trader program. Together we can beat the Fed at the inflation game and build wealth for the future.
Have a great weekend and as always …
Live and Trade With Passion My Friends,