| Dear Reader, Before we dive into why inflation may be worse than you realize, I need to remind you that your offer to join Street Freak for over 58% is off the table tomorrow at midnight. If you're content with your portfolio's performance—and are sure it will outpace inflation—then you probably don't need Street Freak. But if you are looking for an investing service with fresh, high-conviction macro-investing ideas, and you want some help when it comes to beating inflation, take me up on my offer. You'll be joining a really great group of investors. Here is the link you need. A Meeting About a Meeting Last week, the Fed held a meeting where they let everyone know they were "thinking" about raising interest rates in 2023. The Fed Chairman Jerome Powell himself summarized this non-announcement with this statement: "You can think of this meeting that we had as the ‘talking about talking about’ meeting." Here's What Really Happened The Fed just admitted that it won't act to lower inflation for the next two years. When I say, “won’t act,” what I mean is “can’t act.” Given the size of the Federal debt, a rise in interest rates would be devastating to the government’s budget, triggering something akin to a death spiral. They know this, but they won't come out and say it because the Fed doesn't want to be a "shock to the system" (even their little non-announcement managed to rock the markets for a couple of days). They won't take action until we reach the maximum point of pain. Inflation Isn't Going Anywhere The Fed's statements are a tacit admission that the higher inflation we're experiencing isn't transitory. If it were... they wouldn't “consider” raising rates in 2023. There would be no reason to. Tech had its day for almost a decade, now it’s inflation’s turn. It's Worse Than You Think Not many people know this, but the Fed regularly changes the criteria it uses to calculate inflation. Mostly this entails “removing” criteria vs. adding it. Some critics view these changes as a purposeful manipulation that allows the Fed to report a lower consumer-inflation rate. I'm not going to speak to that... but I will offer up this data: If we calculated inflation the same way we did in 1990, the inflation rate would currently be 8%. If we calculated it the same way we did in 1980, it would be at 13%. My Thesis Remains the Same It will take a lot more than words to derail this inflationary impulse. It will take action. And put simply, the Fed isn't willing to do anything more than hold "a meeting about a meeting." We can either play our cards right and set ourselves up to make a lot of money, or we get run over by inflation. You know what I'm doing. I'm going to make a lot of money. I want to take you with me, but for that to happen, you need to take me up on my offer. Jared Dillian
Editor, The 10th Man and Street Freak
Mauldin Economics P.S. On Wednesday, June 30, at 1pm ET, I’m holding a special, LIVE event covering the inflation trade, and you’re invited. I’ll be talking about how to position yourself for maximum profit potential, and what I have my eye on adding to the portfolio in the coming months. There will be a lot happening over the next couple of months with this trade. This meeting will answer your lingering questions and will leave you confident in our strategy going forward. There’s only one catch… The event is members-only. If you want to join the inflation trade and gather everything you need to invest with confidence, then join us. | 