By Kris Sayce, editor, Casey Daily Dispatch
The way we go on about it, you’d think inflation is the only story in town.
If you think, “enough already…” or that you’ve heard it all before…
Don’t switch off.
Stick with us on this.
Because the evidence for ongoing inflation continues to build.
Today, we’ll add more proof to our case… and offer another solution to fight against this threat to your wealth.
If this is your first time reading the Dispatch, welcome. If you’ve been here before, welcome back.
At the Dispatch we have two goals:
To introduce you to the most important investing themes of the day, and
To show you how to profit from them.
We do this by showcasing ideas from our in-house investing experts: Nick Giambruno and Dave Forest. And from the founder of our business, Doug Casey.
It’s Right There in Everything You Buy
The worst thing about inflation is it’s so difficult to notice in the moment.
And even if or when you notice it, it’s easy to grow tired of the subject… or assume there’s nothing you can do about it.
It’s why we urge you to stick with us, so we can help you navigate it. Inflation is here, and it’s not going away.
It’s there in the food on the grocery store shelves, in the cars on the dealership lot, and in the cost of building a home.
It’s also in the electronics you use. As The Wall Street Journal reported yesterday:
Samsung Electronics Co. offset relative weakness in smartphone shipments by capitalizing on another quarter of roaring demand for its memory chips.
Samsung, the world’s largest smartphone and memory-chip maker, is considered an industry bellwether because it is both a major electronics maker and components supplier to the world’s biggest tech firms, including Apple Inc. and Sony Group Corp.
The result of the increased demand? That’s right, price inflation. As the Journal continued:
Contract prices for NAND flash, which provides storage capacity on devices, rose as much as 10% in the second quarter, from the first three months of the year, according to TrendForce, which tracks chip sales. Similar prices for DRAM, which enables multitasking, surged as much as 23% during the same period.
The “Do-Nothing” Fed Does Nothing About Inflation
Unsurprisingly, the Federal Reserve would have you think it has everything under control. And equally unsurprisingly, the mainstream media believes it.
Take the following from the Financial Times. It’s a classic case of the Fed promising action without any real intent to do anything about it:
The Federal Reserve moved one step closer to the day when it will start slowing its massive monetary support for the US economy, following a meeting of policymakers that highlighted both the promise and the perils of the American recovery.
At the end of a two-day meeting on Wednesday, the Federal Open Market Committee declared that it had made “progress” towards its goals of full employment and 2 per cent average inflation, even though it was not yet sufficient to merit any policy action right now.
This is telling. The FT claims the Fed “moved one step closer” to cutting back its stimulus program… while in the next paragraph admitting that nothing will change.
But that’s how the Fed works. It needs citizens to think it has things under control. The reality is that it can’t do anything without the markets reacting negatively.
You saw that in 2018 when the Fed raised rates… only to cut them again later that year. You saw that in recent weeks and months when the Fed and Treasury Secretary Janet Yellen hinted that rates may need to go up.
Bond yields went up… the stock market fell… and both the Fed and Yellen backed down.
But it was all just words anyway. The market is slowly working that out. The Fed is happy with things as they are right now. It’s devaluing money. It hopes the devaluation will keep asset prices high, which will make people think everything is fine… that they’re getting ahead.
Sadly, most people aren’t. That’s true for many investors, too. The official consumer price inflation (CPI) rate is around 5%. But according to John Williams’ Shadow Government Statistics (ShadowStats), the real CPI is around 9%.
[Editor’s note: Williams bases his number on the way the CPI was calculated in 1980. Many people – outside government circles – consider that the “true” price inflation rate.]
In other words, many investors may think a 6% or 7% return on their money is enough to keep them ahead. But if Williams’ numbers are right, even an 8% return isn’t enough.
That means investors have to work harder to find bigger returns.
“Total Resistance to Inflation”
This is a big reason so many people are moving money out of the government-controlled financial system and into private, free-market “money systems.”
The biggest of them all right now is bitcoin. Now, your editor isn’t an expert on the subject. That’s why this past weekend we spoke with someone who is: Casey Research’s Nick Giambruno.
(We’ll publish full transcripts of our conversation starting next week.)
As Nick told us:
Monetization doesn’t happen overnight, and it’s inherently a volatile thing. Bitcoin went from pennies [a decade ago] to $64,000 earlier this year, making it the best-performing financial asset over the past 12 years.
[Investing in it is] as if you discovered gold before the world understood that gold was useful as money.
Right now, bitcoin’s volatility is mainly to the upside. It does go down, of course, but it’s mostly going up when you zoom out. That’s because millions – soon billions – of people around the world are adopting it as money due to its total resistance to inflation and other monetary properties.
The current volatility of bitcoin puts off many folks from converting some of their wealth into it. But it’s volatile now only because people are still trying to understand it.
Once people understand it better and see how it’s completely outside government control and central bank interference, the price will go much higher.
Until then, volatility will continue… And in relative terms, the price will remain lower than it really should be. Of course, that seems an odd thing to say when it’s now around $40,000.
But a few years from now, bitcoin experts like Nick say the price will be much, much higher.
And according to Nick, even at a seemingly high price point of $40,000, now is a great time to buy.
Editor, Casey Daily Dispatch
P.S. How much higher could bitcoin go? Well, to give you some clue, at the moment, Nick has a buy-up-to price of $100,000 on it. That’s more than double the current price.
And that buy-up-to price will likely shift higher as the crypto gains more mainstream adoption. But that’s not the only part of the bitcoin story.
In fact, as Nick shows here, there are many other opportunities to profit from bitcoin. And we’re not talking about the thousands of small alternative cryptos, or “altcoins,” that are available on the market.
These other opportunities are much more niche… but also much more lucrative. In one instance, Nick helped his readers score a 2,123% return in less than 90 days.
You can get the full details right here.