The world is careening towards an inflationary shock. As was the case with the beginning of the Housing Crash, few are noticing what’s happening and even fewer realize the true scale of what’s about to take place.
The original article, written by Graham Summers, is presented here by munKNEE.com – “ The internet’s most unique site for financial articles! (Here’s why)” – in an edited ([ ]) and revised (…) format to provide a fast & easy read. Visit our Facebook page for all the latest – and best -financial articles!
The chart below shows the Producer Prices Index for the four largest economies in the world: the US, the EU, China, and Japan. Note, that Producer Prices are SPIKING in all four economies.
H/T Jeroen Blokland
Put another way, a full 66% of world GDP is currently experiencing a spike in prices. Inflation is already rippling through the economy.
Why does this matter? Because the Bond Bubble trades based on inflation. When inflation rises, so do bond yields to compensate. When bond yields rise, bond prices FALL and when bond prices fall, the Everything Bubble bursts.
Take a look below at the chart for the 10-Year US Treasury. We’ve already taken out the bull market begun in 2007. The single most important bond in the world is tracking lower just as housing prices did in 2006 before the housing bubble burst.
Put simply, BIG INFLATION is THE BIG MONEY trend today and smart investors will use it to generate literal fortunes. Imagine if you’d prepared your portfolio for a collapse in Tech Stocks in 2000… or a collapse in banks in 2008? Imagine just how much money you could have made with the right investments. THAT is the kind of potential we have today and, if you’re not already taking steps to prepare for this, it’s time to get a move on.
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