“Inflation is bad today, but at least it’s not the 1970s…” You hear this a lot these days. It’s hard to think of the 1970s without thinking of the decade’s double-digit rise in the cost of living. Things got so bad Americans took to wearing “Whip Inflation Now” buttons… A “Whip Inflation Now” button the Ford administration issued. Source: Gerald R. Ford Presidential Museum It was a campaign President Ford dreamed up to urge Americans to curb their spending. But the annual inflation rate climbed into double digits anyway. So feeling that inflation was worse for savers in the 1970s than it is now is natural. But as you’ll see today, 2020s inflation is even more challenging for us as wealth builders in one important – and often overlooked – way. Then we’ll get into some simple moves you can make right now to stay ahead of inflation. Over the past 12 months, inflation has shot up 6.2%… That’s going by Washington’s official gauge – the Consumer Price Index (CPI). That’s the biggest yearly jump since 1990. And the press has made a big deal out of it. But the inflation rate is only half the picture when it comes to growing your wealth. The other half – the one missing from most mainstream analysis – is where interest rates and bond yields are. To show you what I mean, let me take you back to 1973… Richard Milhous Nixon was still president. The Godfather won Best Picture at the Oscars. And the annual inflation was the same as today’s – 6.2%. If you stuffed dollars under your mattress, you were getting 6.2% poorer a year in “real” (or inflation-adjusted) terms. But most people don’t save that way. They look to earn income on the dollars they tuck away… say, via certificates of deposit (CDs) at the bank or Treasury bonds. And in 1973, these sleep-easy investments paid out a LOT more than they do today. Take what you could have earned on a CD back then… In 1973, the average monthly yield on a 3-month CD was 6.5%. Even with a 6.2% inflation rate, you could have outrun inflation by sticking your money in the bank. And the average yield on a 10-year Treasury note was 6.9%. That would have also allowed you to grow your buying power. Compare that with today… The highest yield available on a 3-month CD is 0.4%. That locks in a real yearly loss of 5.8% (6.2% minus 0.4%). And bonds aren’t much better… URGENT BUY ALERT: You must buy these 12 stocks now! At writing, the 10-year Treasury note yields 1.5%. That’s more than what the bank will pay you on a CD. But it’ll still cut your buying power by 4.7% a year (6.2% minus 1.5%). Now, let’s zoom in on 1979 – the decade’s peak inflation year… Jimmy Carter occupied the White House. The Oscar judges swooned over The Deer Hunter. And the CPI shot up 11.3% for the year. That’s still not as bad for savers as inflation is today. Because the income on sleep-easy investments was still relatively high… In 1979, the average yield on a 3-month CD was 9.8%. That would cut your buying power by 1.5% (11.3% minus 9.8%). But that’s still a better deal than backsliding by 5.8%, as is the case for folks who put their dollars into 3-month CDs today. And in 1979, you could have earned 9.4% a year by putting your money into the 10-year T-note. That lost you 1.9% (11.3% minus 9.4%) a year in real terms. But it was still better than the 4.7% loss of buying power on offer today. Why am I telling you this? Inflation may not be as headline-grabbing as it was in the 1970s. But thanks to much lower rates of income on sleep-easy investments, it could damage your savings even more. Don’t worry, though… There are plenty of inflation-beating alternatives to cash and bonds that Daily Cut regulars will be familiar with. You’ll just have to put up with more volatility along the way. As I showed you in more detail here, “hard assets” are great alternatives to cash and bonds. Hard assets are hard to produce more of relative to existing supply. These include everything from gold and silver… to “battery metals” such as lithium… to farmland… to bitcoin (BTC). That last one may throw you. But as I’ve been spreading the word on, bitcoin is the world’s hardest asset. Computer code governs its supply. And new supply tapers off over time. So no matter how high the bitcoin price goes, nobody can boost the crypto’s supply to bring prices back down. | Recommended Link | | Best Way See What's Beyond Pharma and Biotech In Washington D.C., behind all the smoke and mirrors, a revolution is quietly underway… And a small group of brilliant investors (including a well-known futurist) believes it will quickly mushroom into a multi-billion dollar industry. Bringing health and improved well-being to countless millions suffering from anxiety, depression, and other mental health issues. Psychedelic Medicine harnesses the healing powers of plant-based medicinal therapies to bring innovative treatments to individuals. It’s truly ironic – because Washington, D.C., the city of Big Government on steroids – recently decriminalized many psychedelics for private use. And it’s ironic because DC is the place where the most important freedom-oriented financial and investing summit of the year (and maybe the coming decade) is taking place... And Psychedelic Medicine is just one of the many cutting-edge topics on the agenda! | | | -- | |
Stocks are also good alternatives to cash and bonds during inflation… Stocks are claims on real assets – think machinery, land, intellectual property, and commodities in the ground. Over time, those real assets will hold their value versus inflating currencies. And as our tech expert, Jeff Brown, has been hammering on… one of the best sectors to be in right now is tech. His mission this year is to get his readers investing in companies that are growing earnings faster than the rate of inflation. And right now, there’s no better place to hunt for these companies than in the tech sector. You may not be able to tap into the high yields and interest rates that were available in the 1970s. But if you favor hard assets and stocks over cash and bonds, you’ll be able to grow your wealth through the inflation of the 2020s. In the mailbag: “It took bravery to jump into crypto – but we’re sure glad we did!”… Colleague Teeka Tiwari is on a mission to mint more millionaires than any other newsletter writer. And if you’re not already following his research, you’re missing out. He first recommended bitcoin in April 2016. Since then, it’s up 14,213% – enough to turn a $1,000 grubstake into $143,130. Other cryptos he’s recommended to his paid-up subscribers are up 29,721%… 31,164%… and even 44,850%. That’s why our mailbag is always filled with thank-you messages from his readers. Take these recent examples… Hi, Teeka. I just wanted to drop you a note to thank you for all your encouragement to invest in [the crypto] space. We have kept the faith and experienced great returns. We would never have done so without your dedication to changing our finances for the better. – David M. Thank you so much for your research and all you do to help us. I have been a Palm Beach Research Group subscriber since 2020. It took bravery to jump in last year and set up crypto accounts, wallets, etc. – but we’re sure glad we did! God bless you for leading us and mentoring us. – Melissa H. Have Teeka’s crypto picks helped you move the needle on your wealth? Share your success with us at feedback@legacyresearch.com. Regards, Chris Lowe
November 29, 2021
Dublin, Ireland Like what you’re reading? Send your thoughts to feedback@legacyresearch.com. IN CASE YOU MISSED IT… | Dump Gold, Buy Bitcoin (And This?) It's a controversial call. But former Wall Street VP and hedge fund manager Teeka Tiwari says he "no longer expects gold to adequately protect your wealth against the money printing happening right now." And for the first time in Palm Beach Research Group history, an editor is telling readers to sell gold… and buy Bitcoin. But this is about more than just one coin… A new class of cryptos is on the rise, Teeka says. Coins he believes could do MUCH better than Bitcoin in the coming months. Even better… You can get the name of his next top crypto pick for free! Click here. 
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