"Crashflation" — A Profit Opportunity
What do you get when you combine a crashing stock market with high inflation?
You get what I call “Crashflation.”
Let me get you up to speed about this…
And then explain how you could profit from it.
For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.
“Crashflation” — A Profit Opportunity
A crashing stock market is bad already.
But add in raging inflation — and you wind up with what I call “Crashflation.”
Folks, crashflation is crushing the portfolios of investors.
But it doesn’t have to crush yours.
In fact, today, I’ll reveal multiple ways to turn it into a profit opportunity.
First, Let Me Explain What’s Going on Here
To set the stage here, first let me cover the three Ws:
- Why inflation is here to stay.
- Why any hope for a market rally is misplaced.
- And what investors like you can do to profit from this ugly scenario.
Inflation Is Here to Stay
Last month, consumer prices jumped ten percent, while producer prices surged eleven percent. This brings down the purchasing power of your dollars!
Why are prices up so much? Four reasons:
Food — We already had problems with the food supply, but the war in Ukraine is making a bad situation worse.
Gas — Oil prices are sky-high, so you’re paying outrageous prices at the pump.
Cars — A shortage of auto parts is pushing the price of cars through the roof.
Then there’s the fourth reason…
No one (but me) is talking about it. But it’s the main reason inflation won’t go away…
Inflation’s Dirty Secret
That reason prices are up so much is wage inflation.
Remember, I’m Bloomberg’s top-ranked Economist in this area. This is my wheelhouse.
Often, you’ll hear that wage increases are a consequence of inflation.
But that’s not true. The dirty secret is that wage increases cause inflation — and these increases are created by state governments!
Wage increases impact everyone. Sure, car prices are up. But if you’re not in the market for a car, this doesn’t really impact you.
In contrast, wage inflation impacts everything and everyone.
And now, after a surge in 2021, wage inflation is about to catch a second wind…
Another Increase in Wages is Coming
The chart below shows fifteen states that hiked the minimum wage in 2021:
Virginia, for instance, raised wages sixteen percent. Colorado was at two percent. But nationally, the average increase was more than seven percent.
And guess what? You can expect the same thing to happen this year. I believe the average wage hike will be another five percent.
And to be clear: if you raise wages, inflation will keep soaring.
As for how this will impact the stock market…
Market Trouble Ahead
Current market sentiment is that if a recession hits next year, the Fed will ease up on interest rate hikes. And that’ll create a market rally.
But if a recession hits, it will completely overwhelm fewer Fed rate hikes!
Bottom line: crashflation is going to cause a lot of pain for a lot of investors.
But it you’re a reader of Moneyball Economics, it doesn’t have to cause pain…
Be Short, Not Long
The S&P 500 could still drop another ten percent.
That’s why you can’t be passive right now.
So don’t just throw money into your 401(k) and hope for the best.
You need to bet on companies going down… you need to be short, not long right now.
If you’d like a helping hand, you should become a member of Moneyball Crash Alert.
Our first three picks delivered double- and even triple-digit returns.
Furthermore, of the sixteen brand-name companies we warned investors to AVOID, fifteen are down.
To learn more about Crash Alert, or to sign up, one of my team members would be happy to help. Just call 844-615-1123.
And meanwhile, if you’re a “Pro” subscriber, check out today’s pick below.
We’re in it to win it. Zatlin out.
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