Save every nickel! Precious metals, and even ordinary metals skyrocket in value due to inflation.
Don’t spend you nickels! They’re now worth 17 cents each. That’s right. Runaway inflation has big and growing consequences for just about everything of value. After a recent attempt by some investors to corner a segment of the metals commodities market, during the Russian war on Ukraine, the price of the metal nickel shot up so much that a coin that was once 5 cents is now worth more than triple that amount — just from the exploding value of the metal contents. Thus, banks are now losing money by supplying nickels. They’re losing 12 cents on every nickel coin that they dispense.
This teaches us a lesson about inflation and war. Russia controls about 20% of world nickel production, and it’s now threatened, along with oil and many other commodities. Home building materials are also under pressure, as is just about everything else.
Billionaire Elon Musk has joined Warren Buffet in trying to guide the masses in the right direction so that we can continue to buy Teslas. Musk recently posted tips on hedging against inflation, tweeting it’s “generally better to own physical things like a home or stock in companies you think make good products,” rather than keeping much money in cash.
Inflation is hitting women, children and minorities the hardest, and there’s no relief in sight. Virus hysteria, government over-spending and war make inflation worse. Biden plans to respond by continuing to blame covid and Putin for inflation. Because the current government has no serious plans to reduce inflation, and the Federal Reserve will likely fail to taper its ponzi scheme monetary policy, it is up to each American citizen to protect our private assets against inflation and increasing government confiscation, and to take advantage of rapidly rising prices for just about everything from food to real estate. The good news for Loft Blog readers is that condos have long been excellent hedges against inflation, and owning a loft is much easier than trying to store a half million dollars worth of nickels.
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Darkness falls on the economy of Los Angeles and the world.
In 2015, the Loft Blog warned readers that inflation would make an appearance in our future. In 2020, that prediction proved very accurate when billionaire Warren Buffett suddenly dumped bank stocks, in favor of gold mining stocks to protect from serious inflation combining with economic stagnation. Since then, federal politicians and bureaucrats have denied the existence of inflation, calling it “transitory,” yet now they try to convince us that inflation is somehow a good thing. That feign might work on a few young people who don’t remember Jimmy Carter’s huge mess in the late 70s, but most Loft Blog readers are not fooled. Our most savvy friends know that today’s era of stagflation is linked to several signs of economic and societal nightmare, enough to possibly make 1970’s inflation look like a cake walk in comparison. But don’t worry — we’ll remind you of the silver lining hidden in this big, dark cloud.
Stagflation is already very much here today, as confirmed by Bloomberg. Just about every day, we hear more and more about “supply chain” problems. This is code for more and more serious shortages, followed by higher and higher prices. With building materials in shorter supply, new home prices and repair costs must go up. With higher gas prices, just about everything must go up in price. From those advanced economists who also happen to be honest, we learn that the economic condition of the federal government is much, much worse than what were are led to believe. Printing money and engaging in radical monetary policy at a feverish pace, federal government spending has exploded to more than $7 trillion last year, much of it free money in exchange for doing nothing, the recipe of inflation and economic stagnation. This government spending has been a primary cause of inflation, according to Tunku Varadarajan of the Wall Street Journal.
The dramatic world fiscal meltdown of 2008 is a drop in the bucket compared to what is happening to consumer debt, business debt and federal government debt today. The biggest difference between then and now is that the Fed and congress currently spread that gaping purse wider to shake out more cash in more ways than ever before, with no gold standard to back up the money, no need to follow a budget, no need to pass taxes to pay for the spending and almost no reporting or oversight of the catastrophic outgoing cash flow. When the money is spent in this way, with nothing to back it up, the US Dollar loses value, and eventually turns into monopoly money like every fiat currency has throughout history. The Fed talks about raising interest rates, but the Fed governors are absolutely terrified to raise rates substantially because previous moves have caused a taper tantrum, severe drop in the stock market and other markets. Raising rates substantially during hard times would guarantee economic crash suffering worse than the 1929 Great Depression. Add continuous states of emergencies, virus hysteria and escalating wars involving competing nuclear superpowers, and “transitory” inflation, which is already runaway inflation, already transitioned from bad to worse. Today’s money-is-no-object emergency mentality can easily push inflation toward apocalyptic levels.
Real estate today is crashing, except with 40+ year high inflation, home prices are mostly crashing up. No matter how bad the economy gets from lockdown, social spending, helicopter money, destruction of countless small businesses, unprecedented wealth transfer from the middle class to the wealthiest 1%, war and the largest economic sanctions in history, the spending to cover these counterproductive activities must increase inflation even more. On top of the threat of nuclear war, we must add another unexpected economic bomb being dropped on the dollar — blockchain cryptocurrencies. Good money chases out bad. New kinds of money destroy the old. As the western world kicks out more and more people and governments from its dollar and SWIFT systems, they have no choice but to use other forms of payment. That’s another one of many nails in the coffin of the once almighty dollar.
As a gallon of gas rises towards $10 in California, a loaf of bread must follow. In today’s era of obscene government overreach, extreme censorship and deceptive propaganda, most Americans now understand that there is no way to reign in spending while federal governments have been handed a silver platter piled high with unlimited power, including unlimited spending power. All prices, including home prices must crash up and down, up and down, in a dizzyingly distraught pattern that lands mostly up, up and away, into the sky as the inversely correlated USD must drop toward $0.00. The good news is that owning real estate provides excellent protection against stagflation. Other super stagflation hedges include gold, collectibles, commodities, quality stocks and cryptocurrencies, DeFi and other newer blockchain investments.
What’s the best way to survive and thrive during economic stagnation and inflation? Get a free list of investments that do best during times of stagflation. Fill out the online form:
