As 2026 begins there is no shortage of headlines that lead me to believe that inflation is going to be a MAJOR problem going forward.

While a lot of hot air is being spent on telling us that things are “GREAT!” the reality on the ground is anything but great. The spin created that inflation has been defeated will likely be blown out of the water during this year of 2026. There are many reasons for my beliefs in this including:

· The Fed admitting that they are “printing up” $40 Billion per month to fund our government because our traditional buyers are becoming sellers and there is not enough demand for the amount of debt we are adding DAILY. The prior buyers have seen the US dollar weaponized. They see a country which is the largest debtor in the history of the world and appears to have NO PLAN to even stop the bleeding let alone to pay down even a portion of the record debts. Looking into the future, many now see that there are only two ways out. Stop adding to the debt and watch a massive collapse or keep “printing” and kick the can further while destroying the purchasing power of the dollar that you will be paid back with in the future.

· The president, US Treasury and Fed all want lower rates. This, in addition to purchasing $40 Billion per month, will have to conjure up possibly TRILLIONS of dollars to manage the interest rates. It is not only that buyers have become sellers but also that, as inflation increases, the interventions in the bond “markets” will also likely have to increase substantially to continue the ILLUSION of stability and solvency. It IS an illusion because without the “money” conjured up out of nowhere that produces NOTHING the illusion would be laid bare.

· The economy is collapsing. The job market is stalling, manufacturing is falling and defaults are piling up. While this sounds like a recipe for DEFLATION it could actually be the impetus for massive INFLATION as the “printing” goes into hyperdrive to cover up the rot in the economy. Keep in mind that as people get laid off, they become a burden on the social structure as opposed to helping prop it up.

· The endless spending on wars (off-budget and not counted in the national debt- just like Social Security, Medicare and Veterans benefits) doesn’t appear to be ending anytime soon and if things keep moving in the same direction, we may find ourselves having to “print” our way into oblivion to keep the war machine greased.

· In a world where shipping lanes are becoming weaponized it doesn’t take much imagination to see that if the US keeps up the gunboat diplomacy that other actors may start pulling the same stunts in other areas. This slows down the movement of goods and adds to the problem of too much cash chasing too few goods. In the event that the wrong people decide to strike back (Iran, Russia, China, etc.) we could see chokepoints that could stop the flow of oil and cause a massive surge in the price of oil and create inflation that would cripple our economy further.

While this list is in no means a full list it does lay out a lot of reasons why prices are likely going way higher.

Of course, the reason that we can’t be 100% sure of anything is that those “in charge” probably have planned what the next moves will be. Since we are not on that e-mail chain, we can only look at the facts as presented and make the best calls we can while knowing that the invisible hand may change the game at any time.

In looking at history, time after time there have been booms and busts. In every instance those “in charge” have chosen to “print” rather than to allow a collapse. Every time the currency being conjured up has its purchasing power destroyed.

This is the major reason that I have been pounding the table about hard assets for the past 10 years. While it has taken longer to play out than I could have imagined the chickens have now come home to roost. Most people are still at the illusion that stocks, bonds, and dollars are the place to be. In my opinion, there are certain stocks that make a LOT of sense, there are VERY few bonds that make any sense, the US dollar is getting hammered.

The place to be, in my opinion, is in hard assets. Gold and silver have seen MAJOR gains but are still woefully under owned here. I believe there is still substantial upside in both- mainly because they are priced in dollars and the dollar is falling. The question isn’t “How high can gold go?” The correct question is how far can the dollar FALL? The main reason to keep the gold price down is to hide the loss of purchasing power in the dollar.

In addition, many other hard assets will likely rise in an inflationary environment also, like oil, uranium, food, water, etc.

Many people ask me about Real Estate and while it is a hard asset and if you own it outright as opposed to having a loan on it, I believe it is great to hold. I would not be a buyer here as it appears to me this is one hard asset that will have to have some serious DEFLATION so that buyers can actually afford to buy again. I expect MAJOR devaluation in real estate that should lead to some amazing opportunities in the future. I believe this because an entire generation has been priced out of the “market” and 64% of households live paycheck to paycheck. With layoffs rising and the economy faltering there could be a large percentage of homes that will be hitting the market with few buyers willing and able to buy anywhere near current prices. Also, inflation in other goods impacts any saving that is contemplated for saving for a downpayment.

Times are changing fast!

Be Prepared!

Any opinions are those of Mike Savage and not necessarily of those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. The information in this report does not purport to be a complete description of securities, markets or developments referred to in this material. The information has been obtained from sources deemed to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct.

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