Inflation. I believe it is important that I write this article at this time because it appears that we may be heading for unprecedented levels of inflation very soon.

If you look up the definition of inflation you get a bunch of baloney about rising prices over time and a broad rise in prices for goods and services over time. Most sites use this explanation, and it is promoted by those “in charge” because it relieves them of their responsibility FOR the inflation.

A more accurate description of INFLATION comes from Britannica Money (Encyclopedia Brittanica) which says that “Inflation refers to the general increase in prices or the MONEY SUPPLY, both of which can cause inflation.” Notice, I said “more accurate.”

The reason it is more accurate in my opinion is that they mention MONEY SUPPLY. What they fail to mention is that the increase in money supply is what generally causes the rising prices. Other factors, like scarcity of items could cause prices to rise for this or that, but the overall cause of inflation is currency debasement by conjuring up currency units out of nowhere in nearly unlimited amounts.

In the beginning many (particularly those that own assets) love inflation because the inflation shows up by artificially raising the PRICE of their assets. Notice I said it raises the PRICE- Not necessarily the VALUE. It also makes it harder for those starting out to participate because of a rising barrier to entry.

Prolonged periods of artificially low interest rates and unbridled speculation like we have seen in the past 50 years- and FAR more since 2008- have caused ASSET PRICES to rise and give the illusion that the VALUE has also risen even though in most cases this is NOT the case. As a matter of fact, I would argue that with every intervention the chasm between PRICE and VALUE gets more and more distorted.

This is one of the biggest reasons that I believe, along with MANY financial experts (Jim Rogers included) that any future downturn in asset PRICES to align with the actual VALUE will have NO HISTORICAL PRECEDENT.

This is a warning to keep a close eye on whatever assets you may be holding. It would be a good idea to evaluate what you believe may happen if a major dip occurs.

My take on the stock, bond and real estate “markets” is that you should be careful at this time because it appears the economy is collapsing FAR faster than the “official” numbers would indicate. This is NO accident.

Now we get to the part where INFLATION becomes a dirty word in the real economy. So much cash is created to keep the ILLUSION of solvency and prosperity alive that the interest expense and current spending can’t be maintained without creating even more cash out of thin air. We are already in a situation where we have added $500 BILLION in new debt in the last 30 days while our “leaders” are on camera telling us that they are “laser focused” on reducing the debt. I would love to laugh but the joke is on us.

Gold, in particular, has been beaten down by traders to give the ILLUSION of dollar strength and mask the unrelenting loss of purchasing power taking place. You may say that gold is at all-time highs. That is true in nominal terms. In reality, because of the price suppression schemes the VALUE is likely FAR higher than the current price indicates. In real terms it may be cheaper now based upon “money printing” than it was when it was FAR less expensive. In addition, the general public is fooled into thinking gold is “risky” while the central banks (ex-FED) buy it all and list it as a tier 1 (riskless) asset. Make THAT up.

Another key that many either overlook or are unaware of is that with technical innovation prices generally FALL. I remember writing an article in about 2012 that brought out that fact.

In it, I mentioned that a basket of goods in 1800 cost $200.00. By 1900 that same basket of goods was reduced to $100.00 because of advances in farming and transportation- mainly railroads. This is back when the technological innovations were miniscule compared to what we have seen in the past 100 years. This also helps to mask the loss of purchasing power.

Another trick is to change the “basket of goods” to include cheaper items and not include certain things. The “official” inflation rate is a joke.

I should mention that every person has a different inflation rate based upon what they buy and how they live. Having said that, FOOD and ENERGY (two things we ALL need) are excluded from Core Inflation- which was 3.1% according to the “official” manipulated numbers. Food and energy are rising faster than the “official” inflation rate but are excluded.

Many are saying inflation is cooling. I believe that was true for the prior year or so. It appears that, similar to the 1980s, we just saw a respite before the real show starts. The inflation is ticking up right now but may become FAR worse very soon. The reasons:

· LAYOFFS. While in the past this would likely have been seen as disinflationary the fact these days is that we are “printing” up cash to pay interest, retire old debt, and enabling current spending. Less jobs means less taxes and more demand for social assistance- all of which must be funded with even more “printing” and spending. It appears to me to be a doom-loop.

· TARIFFS. Tariffs are a tax on you, me, and the importers. If the government is correct and they have already collected $500 Billion- that didn’t come from anywhere but the importers, wholesalers, and US (you and me), further impacting our purchasing power.

· “Printing Money” We are conjuring up cash for social spending, wars, pork in bills to get them passed and there is no end in sight for the obscene amounts of “money” being created. At the same time, we are not PRODUCING anything but FAKE purchasing power. Over time, we have used up the surpluses of goods stored and now we are faced with “too much cash chasing too few goods.” That is a toxic combination for prices.

· BRICS, ASEAN, SCO, Belt and Road, Global South… These organizations represent over 60% of the global population and are all acting to reduce the use of the US dollar in international trade. They are working together to mitigate the fallout from tariffs and monetary bullying by the west. Because the US dollar is still the most used currency in global trade there is still demand for it. Once a critical level is hit the collapse of the dollar could really cause a spike in our prices. Less demand plus MASSIVE supply means LOOK OUT BELOW.

I urge you to believe your own eyes, do some research. Make some wise choices based upon facts and not manipulated “facts” and biases that keep you thinking inside the box- which has been carefully crafted to keep you clueless.

This was never more evident to me that after numerous appearances on CNBC, Fox Business, and others, once I started talking about gold and hard assets the segments go cut short and the invitations ENDED. This is why I call them Financial Game Shows.

You only hear what their advertisers want you to hear. The TRUTH?

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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