July 13, 2021
We’ve sounded the inflation alarm for months now, America. And even though the Fed may be in denial about the Consumer Price Index report, good Americans like yourself are not. Now with staggering prices from the gas station to the grocery store and the financial pain starting to set in, you may be wondering what the best moves are for your investments and money.
Thankfully, former Goldman Sachs banker and frequent American Consequences contributor Dr. David (“Doc”) Eifrig brings us insight into how to prepare for this once-in-a-generation market shift – one that could put your financial well-being at stake. You will need to be prepared to be on the right side of history when The Great Monetary Inflation era ends… and ends badly….
We at American Consequences urge you to take the necessary steps to protect your family’s wealth and listen to one of America’s top experts – watch his full message here.
Liberating Yourself From Financial Lockdown
On September 11, 2001, World Trade Center survivors waited an average of six minutes before heading downstairs after the planes hit. Some waited nearly an hour.
Despite the fire, smoke, smell of jet fuel, and swaying buildings, an estimated 1,000 people took time to shut down their computers. Others made phone calls and gathered up belongings.
In short, with any crisis, people move too slowly. And now, America finds itself embroiled in an impending financial 9/11. Are you going to sit there and do nothing? Or will you act?
Your money, your retirement, your future – everything is at stake right now. And most Americans today have no idea how this looming calamity will change our lives. What’s coming next will be confusing and disastrous for millions, but it doesn’t have to be that way for you. So, first, let me start with the most apparent problem.
Why Is Everything So Expensive?
I’m sure you’ve noticed that prices for almost everything are absolutely soaring… while at the same time, we are running out of, well, everything – from computer chips to appliances to building supplies.
You’ve probably heard the stories of crazy bidding wars for houses. This scenario is playing out all over the country.
And the more you dig into the numbers, the more you see soaring prices and shortages for practically everything we need and value in our society.
Oil prices are up more than 200% in the past year.
Lumber prices are up 300% since 2020 and are at all-time highs. Paper prices are up 40%. Copper prices are at an all-time high. And car prices are sky-high, too.
Prices for food, health care, commodities, shipping, and electricity are all rocketing higher and higher.
Most Americans don’t realize shipping rates are as much as 50% higher than a year ago.
The Kaiser Family Foundation reports the average cost for employer-based family health coverage is now a whopping $21,342 per year!
Yes, there are many reasons for these soaring prices: The economy returned to its baseline, people want to live in bigger houses, the supply chain is a mess, pent up demand, etc.
But you have to understand what’s happening here to have any chance of protecting and growing your money in the years to come.
So, I want to say this as plainly and simply as I can…
It doesn’t matter how the White House, the U.S. Treasury, or the Federal Reserve create new money and new credit. It doesn’t matter what tricks they are using or how they spin it. America is about to experience one of the most significant inflationary periods in our nation’s history.
And make no mistake about it: Inflation will push millions into a collectivist nightmare I call the –
Most Americans, I’m sure, are feeling pretty good right now.
Home values are sky-high… Stocks are soaring… Your brokerage account may have never looked better.
But here’s the truth no politician will bother sharing: Prices are not going up – it’s the value of our money that’s going down.
This is what always happens at the start of a period of massive inflation and a collapsing currency.
Economists call it the “Money Illusion.”
It’s what happens when people start to measure their wealth in simple numeric terms… instead of real terms – in other words, what your money can buy.
This is what happens when people don’t take into account money printing, increased debt, and inflation. They wrongly believe a dollar today is worth the same as it was last year – even after the Fed has pumped trillions and trillions of new money into the system.
Inflation causes massive economic distortions, which is one of the reasons why, as Bloomberg recently reported, we are “suddenly running low on everything.” And while you may have more money in your bank or stock account, it’s not worth anything close to what it was just a year or so ago.
I estimate 90%-plus of the American public is falling for the Money Illusion today. But when you look back at financial history, you realize this is nothing new.
Massive inflations are always incredibly confusing to the general public.
Look at Germany’s Weimar Republic in the early 1900s, for example. It’s the most famous case of inflation and currency collapse – followed by Financial Lockdown – in history.
And to outsiders of the time, it was apparent Germany was destroying its currency, locals held on in a state of confusion and denial.
And this is what’s happening in America right now.
Unfortunately, the sad truth is most Americans will do the same thing Germans, Hungarians, and Austrians did with their soon-to-be-worthless currencies, even after they’d been devalued for the umpteenth time: They will cling to their increasingly worthless money.
I’m not sure if you remember books, America, but it’s what people used to sink their faces into to avoid dealing with family and strangers. Our editor-in-chief, P.J. O’Rourke, has written a few in his time, and he’s re-releasing his bestselling Eat the Rich, complete with a new chapter to take on the absurdity of 2021 economics. And as an American Consequences subscriber, you can have access to the newly released edition for free! Claim Your Copy Now.
Americans Gone Wild
When people see prices rising and hear stories about how everyone around them is getting rich, no one is sure what’s happening or why, but they instinctively know holding cash is not the answer.
So they become reckless, and the velocity of speculation skyrockets.
Americans are pouring money into the markets and other wild speculations in record numbers.
Did you know Americans opened more than 10 million new brokerage accounts last year? That was a new record. And these folks aren’t buying indexes or dividend stocks.
They’re wildly speculating – just as the citizens of Germany, Hungary, and Austria did a century ago.
For example, more than half a trillion dollars’ worth of stock options were traded on a single day earlier this year. That’s the highest single day on record in U.S. history.
The same is true for highly speculative penny stocks.
We saw an incredible 1.9 trillion transactions in over-the-counter markets – where many penny stocks trade – earlier this year.
That’s a 2,000% increase versus the previous year!
Also, an astounding 28% of all American adults bought GameStop (GME) or other “viral stocks” earlier this year.
The median investment was just $150, and 43% of these folks said they had just signed up to get a brokerage account in the last month.
We’ve never seen this level of wild speculation in our lifetimes.
In yet another sign of the speculative frenzy taking place, a flood of new companies is going public.
We saw a total of 480 new IPOs in 2020 alone – the highest amount since 1999. And this year has been even crazier. Shaquille O’Neal, Serena Williams, and Colin Kaepernick have formed their businesses to take private companies public.
At 503 IPOs through June, we’ve already beaten 2020 levels.
This is the exact type of behavior you should expect when the money supply expands to unprecedented levels.
It’s all hard to fathom, I know. But it’s the reality we’re living in right now.
As one investment fund manager told the Wall Street Journal about new startup firms: “I’ve never seen it this frenzied. It’s lightning-fast rounds with a lot of cash.”
And that brings me to another critical sign of massive inflation and monetary devaluation: currency speculation.
Most people don’t know this, but it’s estimated that in Germany in the 1920s, more than a million citizens were involved in currency speculation, mainly through what was known as Winkelbankiers – backstreet operators who made a living selling foreign currencies.
It sure sounds a lot like today, with Americans piling into cryptocurrencies at unprecedented numbers.
The figures are just extraordinary. While many cryptocurrencies have soared thousands of percent in recent years, the total money in bitcoin recently hit $1 trillion. And the whole cryptocurrency market has reached $2 trillion.
The things people are gambling and speculating on get crazier by the day:
- A piece of digital artwork by a virtually unknown artist “Beeple” sold for a staggering $69.3 million.
- Regular folks spend thousands and sometimes millions on “ownership rights” to certain images or video clips, called non-fungible tokens (“NFTs”). Anybody can watch these clips any time they want, by the way. Still, people are paying enormous sums to say they “own” them. (For example, a short clip of an animated flying cat with a Pop-Tart body sold for roughly $580,000.)
- Sales of “collectible” sneakers are up 100% from a year ago. And the luxury auction house Sotheby’s just sold a 2008 used pair of Kanye West’s Nike sneakers for a world-record $1.8 million. But wait, it gets even crazier…
- The person who bought the sneakers is Gerome Sapp – a former NFL football player who plans to turn the used sneakers into a “security,” regulated by the U.S. Securities and Exchange Commission. Soon, anyone who wants to be a part-owner can do so by paying $15 a share.
- Sapp is the CEO of social investing platform Rares. He says the pair of sneakers will become their own “mini-company.”
Does this sound normal to you? Does this sound like a population that trusts the value of their currency?
It sure doesn’t sound “normal” to me.
Think about it: Many Americans today would rather own a share of a celebrity’s used sneakers than U.S. dollars.
We laugh at 1920s Germans who needed wheelbarrows of money to buy a loaf of bread. We say to ourselves, “That could never happen here.”
We scoff at the tulip mania of the Netherlands in the mid-1600s when the Dutch became enraptured by tulip bulbs that produced striped and speckled flowers.
During this time, tulip bulbs changed hands for the equivalent of a skilled craftsman’s annual salary, and some sold for the equivalent price of a posh house!
But is what happened in Germany or the Dutch tulip bulb craze any different than people betting on used sneakers, digital art, or video clips right now?
Sooner than most people think, millions of Americans will find themselves abandoned: pushed out of the dwindling middle class, out of private retirement and health care, and out of a decent life of liberty. To most folks, how and why this will happen is unknown. That’s why Dr. Eifrig has gone public with the most vital and comprehensive analysis of this fiscal emergency. Get the details here.
The Denial Trap
The crazy part is, despite all the evidence I’ve shown you, most Americans are still in the “denial and procrastination” trap that snares the general population at the start of any new inflation.
In part, that’s because many of our supposed “experts,” including Fed Chairman Jerome Powell, are saying recent price increases are just “transitory.”
That’s a fancy economist’s word for “not permanent,” and it’s what “experts” often say at the beginning of inflationary cycles.
The truth is, all inflationary periods are “transitory,” but can you afford to see your stocks fall and not recover their real value for a decade or possibly longer?
Can you afford to see the value of your retirement plans and pensions cut by 33% at a time when you need that money most?
Let’s be clear: The Fed does not exist to protect you and your money.
The Fed is there to protect banks and the government. So, it will say things to convince you that inflation is not a problem, just as it did during America’s last significant inflationary era years ago…
At a Federal Reserve meeting back in January 1968, one member talked about how “there are three main developments that could conceivably moderate the inflationary impetus of the economy in the months ahead.”
Then in 1970, Fed members discussed how “the recent success in arresting the inflationary psychology of investors had been a year or so coming.”
Of course, inflation soon hit 11% in a single year.
Look, I know there is no guarantee I’m right about what’s unfolding in our economy and that what I’m predicting will come true.
Maybe things will go back to “normal.” Perhaps you really can print a trillion new dollars and not affect the financial system – but I strongly doubt it. Of course, I’m not the only one saying these things.
Investing legend Warren Buffett and billionaire Bill Ackman both agree that we’re witnessing the Great Monetary Inflation.
Sadly, this is all going to tear our country apart over the next few years.
On one side, there will be those who understand what’s happening and who take the necessary steps. These folks will continue to get even richer.
On the other side, there will be Americans who won’t understand what’s going on until it’s too late, clinging to a collapsing currency, imprisoned by the financial lockdown, and all the while falling further and further behind.
In only a few years, the wealth gap in America will be even more expansive than it is today.
What will happen to the world then? To our country?
I don’t know exactly, but my best advice is simple: Ensure you are on the right side of history.
To do that, I humbly offer this critical message on what you can do to preserve your family’s wealth, including how to put together the perfect inflation-era portfolio.
Right now, America’s finances are on fire. There’s smoke billowing out and precious time left. And the riskiest move right now is doing nothing. Don’t get stuck, and don’t rely on the government to save you.
It’s time to save yourself.
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Managing Editor, American Consequences
With Editorial Staff
July 13, 2021