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Impending Stock Market Catastrophe: The Looming Inflation Nightmare


A third wave of inflation, greed-flation, is about to hit consumers. It could keep consumer inflation high and ruin the bull market in stocks. I'll show you why and how to invest. Become an investor in Let's Talk Money and earn monthly income! Be Ready June 27th Although inflation has come down from surging to a 9% annual pace last year to 4.1% last month, it’s still double the Fed’s target of 2% and could be coming into a new wave of price increases. That would force the Fed to increase interest rates again, disappointing stock investors and causing the market to give up much of this year’s gains. That’s from analysis by UBS Global Wealth Management which says US consumer price increases have been forced higher by a series of waves rather than a singular force. The inflation waves have come one after another, making it look like one continuous movement in prices. Now a third wave is coming that could surprise everyone. The first wave of inflation was in consumer durable goods, the rapid increase in buying of long-lasting consumer products like appliances and cars during the pandemic. The second wave was supply-driven from multiple events. The pandemic broke supply chains across the world as companies struggled to get goods from factory to consumer. The combination of these first two waves pushed prices skyward and inflation to a multi-decade high of almost 9% last year but both are largely faded by now. The price of oil has come down on fears of an economic slowdown and consumer spending is showing signs of weakness. The third wave of inflation, the one keeping inflation stubbornly high this year, is what UBS is calling greed-flation. Greed-flation is where, after a period of inflation, companies realize that consumers have accepted price increases. Companies then justify further price increases, even as their own cost inflation is slowing, without a pushback from customers. Consumers have become desensitized to inflation and don’t realize that now the biggest factor in higher prices is companies trying to increase their margins. We see proof of this greed-flation in a comparison of supply chain costs. Even as consumer prices have increased at a 4% pace over the last year, commodity prices have plunged 21% so far this year according to World Bank data. That drop in commodity prices should have been hugely deflationary, yet inflation continues higher. Wage costs continue to be a factor in inflation but household income hasn’t kept up with overall inflation so it’s not just wages that is driving prices. Quick-Start Guides! FREE Step-by-Step Guides to Get Started Fast! ⏩ Make an Investing Plan Right for YOU! 5-Minutes to a Personal Investing Plan ⏩ Open an Investing Account. How to Open a No-Fee Investing Account and Start Buying Stocks in 5-Minutes! ⏩ Easy, Step-by-Step to Analyzing Stocks! 5-Minute Guide to Picking the Best Stocks! 🤑 Get The Weekly Bow-Tie - my FREE weekly email newsletter sharing market updates, trends and the most important news! Market Updates for the Smart Investor! My Investing Recommendations 📈 Check out the stock simulator and Get up to 12 FREE shares of stock worth up to $10,000 when you open a Webull investing account with any deposit! 🤑 📊 Download this Portfolio Tracker and Investing Spreadsheet! [Community Discount Code] ✅ FREE Report! See the top five stocks in my portfolio, the five stocks I'm buying for the next 30 years! ✅ Want MORE Free Stocks? Robinhood gives you from $5 to $200 and let's you pick your stock! You'll also get a link to share and get more free stocks. I've collected over $730 in free shares. Get your free shares and link here ✅ SoFi gives you $25 just for opening a savings account! I have savings, checking and an investing account...and own SOFI shares! Get your $25 free here ✅ 14-Day Free Trial and get 30% off Premium Access to the largest investment analysis community in the world! Lowest price online for Seeking Alpha premium access! Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through dividend stocks, investing and ways to make more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps. #inflation #stockmarket #stockmarketcrash...(read more)



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The Inflation Nightmare about to Hit the Stock Market In recent months, there has been growing concern about the potential threat of inflation looming over the stock market. As economies around the world recover from the impact of the COVID-19 pandemic, central banks have implemented unprecedented monetary stimulus measures to support businesses and individuals. However, the unintended consequences of these actions could result in an inflation nightmare for investors. Inflation, often referred to as the silent thief, erodes the purchasing power of money over time. When prices for goods and services rise, the same amount of money buys less, leading to a decrease in real value. While some level of inflation is deemed healthy for a thriving economy, a sudden and substantial surge can cause havoc in financial markets. The Federal Reserve, for instance, has been flooding the market with liquidity by keeping interest rates near zero and purchasing large quantities of government bonds. While these actions were necessary to stabilize the economy during the pandemic, experts fear that such excessive money supply could trigger inflation in the long term. One key factor that contributes to inflation is increased consumer spending. As lockdowns ease and people regain confidence, there is pent-up demand for various goods and services. This surge in spending is further fueled by stimulus checks and increased savings by individuals during the pandemic. As the money supply flows into the economy, prices may rise due to higher demand. The rise in commodity prices is another red flag for potential inflation. Prices of raw materials such as copper, oil, and lumber have skyrocketed in recent months. This surge in commodity prices can have a knock-on effect on other industries, such as construction and manufacturing, leading to higher production costs. These increased costs may ultimately be passed onto consumers, contributing to inflation. The stock market, which has seen tremendous gains since the pandemic-induced market crash in 2020, could face the brunt of inflation. Inflation erodes the value of future earnings and reduces the purchasing power of consumers, affecting corporate profits and economic growth. As a result, stock prices may suffer as investors reassess their expectations for future returns. Inflation can also impact bond markets. As interest rates rise in response to inflation, the value of existing bonds decreases. Investors demand higher yields to compensate for the declining value of fixed-income investments. This rise in interest rates affects companies' ability to borrow money, which could hinder their growth prospects and place further downward pressure on stock prices. To mitigate the potential inflation nightmare, investors should consider diversifying their portfolios. Allocating a portion of investments to assets such as commodities, real estate, or inflation-protected securities can help hedge against rising prices. Additionally, investing in companies with strong pricing power and the ability to pass on increased costs to consumers can mitigate the negative impact of inflation. Furthermore, staying informed and attuned to economic indicators and central bank policies is crucial. Keeping an eye on inflation expectations and adjusting investment strategies accordingly can help navigate through uncertain times. The long-term effects of the monetary stimulus measures employed during the pandemic are yet to unfold fully. While inflation concerns persist, it is crucial to remember that it is just one piece of the puzzle in the complex world of investing. By staying vigilant, diversifying portfolios, and making informed decisions, investors can navigate the potential inflationary storm and protect their investments in the stock market. https://inflationprotection.org/impending-stock-market-catastrophe-the-looming-inflation-nightmare/?feed_id=128003&_unique_id=64dcdd53a87d2 #Inflation #Retirement #GoldIRA #Wealth #Investing #bowtienation #howtoinvestinstocks #howtoinvestmoney #inflation #josephhogue #letstalkmoney #stockmarket #stockmarket2023 #stockmarketcrash #stockmarketnews #stockmarketthisweek #stockmarketupdate #Stocks #InvestDuringInflation #bowtienation #howtoinvestinstocks #howtoinvestmoney #inflation #josephhogue #letstalkmoney #stockmarket #stockmarket2023 #stockmarketcrash #stockmarketnews #stockmarketthisweek #stockmarketupdate #Stocks

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