Inflation is a problem for the consumer, not the investor.

But here’s the rub, you and I are both consumer and investor.

So, if we don’t want to feel the burn of rising consumer prices and a less powerful dollar, what do we do?

We make investments that offset or outpace consumer inflation rates.

Today I’m going to tell you exactly how you can do just that, but first I need to set the stage by tossing a few numbers at you.

Welcome to the Number Toss

• We started the year with a consumer inflation rate of 1.4%. This month, we hit 5.4%. This is a rate of inflation not seen in 13 years.
• Since the pandemic began in March 2020, we’ve passed stimulus bills worth a collective $4.8 trillion dollars.
• About $867 billion of that went directly into the hands of Americans in the form of over 333 million stimulus checks.
• Just last week, Congress passed a bipartisan $1 trillion dollar infrastructure bill. At 4 am the next day, they managed to squeeze in a $3.5 trillion budget resolution for what they say is for healthcare, child care and education.

We have a spending problem.

At this point, a 5th grader could look at those numbers and understand why we have the inflation levels we do.

When Biden was elected, I said that there would be a $10 trillion deficit in 2021.

If the new $3.5 trillion budget resolution passes in its current form, we will be up to $7 trillion, with four months to go. I will then be owed an apology from the people who said my prediction was ridiculous.

Is this Weimar Hyperinflation?

I’m not going to sit here and tell you that we are on the cusp of 1920’s Weimar Germany-Style Hyperinflation.

But I will say there are parallels that can’t be ignored.

Last week, a reader of mine sent me an excerpt from Dying Of Money: Lessons of the Great German and American Inflations by Jens O. Parsson.

I’m going to share a few of the relevant passages with you. The language is a bit older, so if you want to skip to a modern summary, just scroll down.

“The stimulation of the government’s easy money spread through virtually all levels of the German economy. The life of the inflation in its ripening stage was a paradox which had its own unmistakable characteristics. One was the great wealth, at least of those favored by the boom. These were the ‘profiteers’ of whom everyone spoke. Industry and business were going at fever pitch. Exports were thriving; that was one of the problems. Hordes of tourists came from abroad. Many great fortunes sprang up overnight. Berlin was one of the brightest capitals in the world in those days. Great mansions of the new rich grew like mushrooms in the suburbs. (...) Prodigality [excessive or extravagant spending] marked the affairs of both the government and the private citizen. When money was so easy to come by, one took less care to obtain real value for it, and frugality came to seem inconsequential. For this reason, Germans did not obtain so much real wealth as the growth of money alone would have indicated. (...)

“Greater numbers of people remained on the outside of the easy money, looking in but not able to enter. The crime rate soared. Although unemployment became virtually nonexistent and many of the workers were able to keep up with the inflation through their unions, their bargaining, and their cost-of-living escalator clauses, other workers fell behind the rising cost of living into real poverty. Salaried and white-collar workers lost ground in the same way. Accounts of the time tell of a progressive demoralization which crept over the common people, compounded of their weariness with the breakneck pace, to no visible purpose, and their fears from watching their own precarious positions slip while others grew so conspicuously rich.”

In summary: The German government began printing money to solve its problems, the people spent it. Very few spent it on the right type of assets. Bread shot from 250 marks in January 1923 to 200 billion marks in November 1923 – that’s a 79,999,999,900% increase over 11 months. People burnt money for warmth. The end.

Every once in a while, you read something that just knocks your socks off. Which is how I felt when I read that excerpt.

You can’t ignore the similarities.

Do you want to know who the winners were during that period of hyperinflation?

The individuals who invested in hard assets and essential services.

One guy, Hugo Stinnes, did so well using this strategy, they called him the Inflation King.

He not only owned coal mines (which create energy, an essential service) but he operated shipping lines that transported other integral commodities like lumber and grains.

Now, granted, he was super-wealthy going into hyperinflation. But because of what he owned and invested in, he not only kept his riches, he increased them.

People like Warren Buffett and Bill Gates are still making this strategy work for them today. (Like them or hate them, they know how to make money.)

I’ve been following it, and so have my readers.

You don’t have to be a millionaire, billionaire, or even a thousandaire to profit from this strategy—it works for all income levels.

This email isn’t a plea for you to join one of my newsletters (not that I’d ever discourage you either—you’re always welcome).

But instead, I want you to know that I’ve organized a special report that contains eight ways you can start profiting from inflation—as early as today.

I’ve done the research for you. All that you have to do is read it, see if you agree, and then log in to your brokerage site. Simple as that.

And as I mention on this page, I’ve included price targets for each pick. So, if at any point, you want to exit and take profits, you’ll have a good idea when to do so.

SPECIAL NOTE: One of my picks is set to return 134% from current levels—which is certainly nothing to scoff at.

Neither you nor I have the power to lower inflation, but we can profit from it.

Follow this link to obtain your copy of Inflation Bull: 8 Ways to Profit here.

Jared Dillian
Editor of The 10th Man, Street Freak, and renowned daily letter for institutional investors The Daily Dirtnap
Mauldin Economics