| Dear Reader, There's a great quote from Peter Lynch, the famous fund manager, who said: "The day after the market crashed on the 19th of October 1987, people began to worry that the market was going to crash." Meaning, people rarely take action until after an event has happened. That's not the smartest way to do things, but it's generally how we function as a society. But the truth is, prevention is easier than repair. I've been pounding the table on inflation since July of last year. I put out a call... “It's time to start building a hedge, but more important, it's time to take advantage of the massive profit opportunity inflation presents.” A lot of you listened, and that is exactly what we've been doing together—making a lot of money on the inflation trade. But some readers weren’t sure about higher inflation being on the way—no matter how much proof I handed them. After all, at the end of last year we were sitting at an inflation rate of 1.4%. Who (aside from myself) could have envisioned inflation sitting at 5% in a matter of months? Taking time to make an informed decision is usually fine. I often roll ideas around for months before I commit. So I’m not going to fault anyone for choosing the “wait and see” approach. But now it’s time to take action. Today we have 5% inflation, which is a 13-year high not seen since 2008. That's concerning in itself. But more so because... it's not going to stop at 5%. I expect to see 6% this fall and a full 10% next year. Others have projected higher numbers... Wharton professor Jeremy Siegel recently said “we could easily have 20% inflation” in the next two to three years. Regardless of the exact number, you can expect one thing: Inflation will be destructive and the majority of Americans are NOT ready to deal with it. In the near term, they will be spending more than expected on everyday goods. In the long term, they could lose up to ¾ of their retirement account’s value as the dollar's purchasing power drops. Let’s say our “new normal” for the next decade is an average of 10% inflation year over year (not the 2% the Fed wants to average)... If you planned to retire in 10 years with $1 million, you’d be in for a shock. With an inflation rate of 10%, you would need $2,593,742—more than double what you planned to set aside—to maintain your lifestyle in retirement. This is why I don’t mess with inflation, and why “THE PLAN” is to both protect myself and, put simply, make a lot of money. I can help you do the same. I've laid out my strategy in The Inflation King's Playbook. It’s a 5-minute read that could change your life. The strategy I’m offering doesn't have to encompass your entire portfolio—I would never suggest that—but it could play a huge part in not only saving it from the ravages of inflation, but in driving a hefty portion of your profits. Jared Dillian
Editor, The 10th Man
Mauldin Economics | 