Retirement Lifestyle Advocates
It’s the Fed’s “hold my beer” moment. After more than a year in which Federal Reserve leadership appeared clueless, pollyannish, and indecisive, the Fed is conducting a full-throated messaging campaign to show that it is as serious as cancer about the inflation surge that is scaring the bejesus out of consumers, investors, and economists.
Stocks will fall, real estate prices will collapse, and unemployment will soar.
From where I sit, it seems that stagflation is the most likely economic outcome near term.
The premise of my best-selling book “Revenue Sourcing” is that an aspiring retiree needs to plan for one of two economic outcomes, either inflation followed by deflation or just deflation. As time has evolved, it has become increasingly apparent that we are seeing inflation soon to be followed by deflation.
In this week’s “Portfolio Watch”, I want to give you a preview as I think it’s important to understand how evolving money leads to economic seasons and what I believe are predictable investing conditions.
The reality is that inflation is a result of extremely loose, I would argue reckless, monetary policy.
Russia has now loosely tied its currency, the Ruble, to gold and requires any country that Russia deems to be unfriendly to use Rubles or gold when trading with Russia.
Despite the ever-so-slight rally in stocks this week, I view the primary stock market trend as down. Unless the market highs of the end of 2021 are exceeded, this will be the case.
Thomas Paine, a hero at the time of the Revolutionary War but later much maligned over his views said, “Money is money and paper currency is paper. All the invention of man cannot make them otherwise.”
Stocks rallied and gold fell last week. At this point, I don’t view these developments as trend-changing, rather as counter-trend rallies.