The Coming Inflation Tsunami And How to Prepare
The comments below are an edited and abridged synopsis of an article by Alex Krainer
The author has published a number of articles warning about the risks of inflation; he feels that this should be the top concern, because inflation is the most powerful and indiscriminate wealth-destroying force. QE has been ongoing since 2009 and since it had no effect on inflation, it must be under control. Then the pandemic happened. We passed the phase transition, suggesting that an acceleration of inflation was imminent, but the response was lacklustre. A little over a year later, inflation can no longer be ignored.
In April 2012, economist Robert Wenzel spoke at the Federal Reserve Bank of New York. He told the central bankers that “vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or, if you stop printing, another massive economic crash will occur. There is no other way out.”
Up for discussion: The money supply tsunami; price inflation inertia; velocity of money and human psychology; gestation and the eruption of 1970s inflation; destruction of wealth; what could trigger price inflation and when; offshore dollars—another risk factor; will it be like the 1970s or could it be worse; solutions; commodity futures—the best way to protect your wealth; and commodities—overdue for a major price readjustment.
“We can’t predict how high or how fast the prices will move, but the one thing we know for sure is that large-scale price events almost invariably unfold as trends which can span months and years. Systematic trend following is the most reliable way to navigate them.”