Dear Reader,

Yesterday, I said inflation would hit 10% next year.

Now we’ll take a closer look at why I made that prediction—and what you can do about it. If you want to skip ahead to my plan to profit from this period of higher inflation, just click here and read my letter.

Trillions and Trillions

If you throw money at a problem, the problem usually ends up asking for more money.

Which is why the US government has—

• Passed three record stimulus bills that cost a combined $4.8 trillion; and
• Handed out over 160 million stimulus checks.

Now it’s looking to approve a new infrastructure stimulus bill that could cost anywhere from $4 trillion to $6 trillion.

If you're asking yourself, "Where did the government get that money?"

You're asking the right question, because...

30% of US dollars were printed in the last 16 months.

See that giant uptick on the far right? That is the government printing trillions of dollars.

In fact, the government printed more money in one month last year than it did in the first 200 years of our country’s existence.

Money Printing Already Led to 5% Inflation

The last time the US government spent money like this was during WWII. Back then, it used the newly printed dollars to build planes, tanks, aircraft carriers, and military bases.

This time, it closed the economy and halted production on the things we buy. Then it gave people $391 billion in “no-strings money” with a mandate to spend it as soon as possible... on the very items it had we just halted production on.

When a flood of money is chasing the same goods, you get:

The highest level of price inflation in 13 years.

That is what we already have with the latest CPI print—5% inflation.

You can't tell everyone to stay home and expect the economy and supply chains to continue functioning at maximum capacity.

There will still be farm workers, truck drivers, loggers, factory workers, and hotel cleaning staff. But if there's nothing to transport, the truck driver is at home on enhanced unemployment.

Everyone on that list is at home on enhanced unemployment.

Wages Are Sticky

Today, the guy on enhanced unemployment benefits is essentially making $21 an hour. Why would he return to his old job for less than that?

That is what employers are finding out. The economy is reopening, but no one is rushing to fill their old positions.

This is pushing employers to offer higher wages and some pretty extravagant incentives. I've seen everything from $50 just to show up to an interview… to covering your college tuition. You can read more about it here.

Let’s go back to truckers for a second—there’s still a shortage. A couple of years ago, their median annual pay was around $40,000. Now companies are offering $70,000.

Wages are sticky. If you start paying people $25 to $30 an hour for a job that used to pay them $10 to $15, that is not going back down—ever. That is the new base wage.

Who Pays?

Who is going to pay for those higher wages?

You are. In fact, you ALREADY are by paying marked up prices for everyday goods.

So, how do you protect yourself from inflation? Or let’s take it a step further… How do you profit from it?

During periods of rising/extreme inflation there are certain portions of the market that perform exceptionally well.

I’ve outlined those market sectors here, along with specific investments that you should remove from your portfolio immediately.

If you want to profit from inflation, I suggest reading my letter now.

There is no time to waste—inflation is already eating your money.

Jared Dillian
Editor, The 10th Man and Street Freak
Mauldin Economics