Stock News: Inflation Era Coming

June 10, 2021, 1:30 pm EDT

Inflation Era Coming

It is not easy to know how hard to deal with the inflation era because we were not there during 1929-30. Maybe some of us went through 1980 who may know a little bit about Fed interest rates went to 20%. Well, it is time to prepare for it as the Consumer Price Index CPI reaches 5%, according to the US Bureau of Labor Statistics.

Pay attention to the featured chart we notice that last time (2008 Summer) CPI rose above 5%, recession followed it. It was the result of Fed policies of so-called affordable housing or sub-prime mortgage. Housing prices shoot up to the sky from 2001 to 2007 with more than +20% gains every year. It sounds familiar to us now when I check our housing prices today. 

Artificial low-interest rates, numerous rounds of stimulus, trillions of infrastructure projects, are the formula to let policymakers and people happy for a very short period. 

There are few ways to protect your investment:

  • Commodity in energy: oil, natural gas, alternative energy (ex: solar)
  • Commodity in basic material: steel, copper, etc
  • Precious metal: gold, silver
  • Food: chicken, cow, processed food, package food

The stock markets still rise today with this news but the end time for this record 12 years old bull is near the late-cycle. Be prepared.

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