Editor’s Note: The Department of Labor dropped a bombshell last week, confirming investors’ fears. Inflation is surging.
Chief Income Strategist Marc Lichtenfeld predicted this months ago – and also made two other key forecasts Associate Franchise Publisher Rachel Gearhart digs into in today’s Wealthy Retirement.
– Mable Buchanan, Managing Editor
Just last week, the U.S. Department of Labor announced that the annual inflation rate was a whopping 4.2%. The Federal Reserve, which until recently estimated that inflation would be 1.8% for the year, has been eating crow (more on this in a moment).
But The Oxford Club – and more specifically, Chief Income Strategist Marc Lichtenfeld – saw the writing on the wall a while ago.
In the September 2020 issue of The Oxford Income Letter, Marc said, “We’re at the beginning of several trends: an infrastructure boom, rising metal prices and inflation.”
Admittedly, analysts have been predicting an infrastructure boom since before former President Trump took office.
Of the three predictions that Marc made, the one regarding the infrastructure boom was the least surprising. That said, Marc’s timing was spot-on. Check out the surge in infrastructure since September…
The Global X U.S. Infrastructure Development ETF (CBOE: PAVE) is up more than 59% since September.
Then there was Marc’s prediction about a rally in metals prices… during a rally in metals prices.
In 2020, the prices of gold, silver and copper had spiked to their highest levels since 2013, but Marc thought they could go even higher.
Since the end of September, silver is up 17%, palladium is up 28%, platinum and aluminum are up around 40%, and copper is up a staggering 56%.
Since Marc’s prediction, gold hasn’t cooperated and is down around 3%.
In a recent call, Marc explained, “I’m not sure why gold isn’t participating in the rally. Perhaps Bitcoin is replacing gold as a store of value for some investors. But I think we’re in the very early stages of a big bull market in most metals.”
The boldest of Marc’s three predictions was the one he made about inflation.
In September, Marc said, “The risks of inflation are now unquestionably higher than they have been in decades. To ignore those risks would be a mistake.”
At the time, the Fed forecast 1.8% inflation for 2021. Hardly a number to lose sleep over.
Meanwhile, Marc was pounding the table that inflation would be well above 2%.
His argument was simple: Since 1914, the average historical inflation rate has been 3.2%.
For the 12 months that ended in September 2020, the annual U.S. inflation rate was a measly 1.2%.
It had to go up from there.
And boy did it…
As I mentioned, last week, the Department of Labor announced that the annual inflation rate was a colossal 4.2%.
In March 2021, the central bank revised its 1.8% inflation estimate to 2.4% for the year.
It was only six months behind Marc in admitting that we may be staring down the barrel of some daunting inflation numbers. (Though, it is the Fed… Is anyone really surprised it made a bad call?)
Marc’s predictions have panned out, so what now?
“The infrastructure, metals and inflation trends are just getting started,” Marc says. “Investors should add positions that will benefit from rising inflation, such as financials and commodity plays.”
Another way Marc is recommending combatting rising inflation is with cryptocurrency.
But it’s not what you might think…
At $50,000 a pop, Bitcoin is quite a gamble… And it would need to reach $100,000 per coin just to double your money! Don’t get me started on Dogecoin.
Luckily, Marc has found another way to get in on the white-hot crypto trend with a $9 “backdoor” investment opportunity.
According to Marc…
There are many who believe that crypto – specifically Bitcoin – is a good hedge against inflation because of the finite amount of Bitcoin that exists.
Should crypto continue to be popular, owning the stocks of companies that serve the crypto industry (and can make money no matter which way crypto prices go) will be an excellent way to increase your buying power and stay ahead of inflation.
If you’re interested in combatting sky-high inflation and dipping your toe into the crypto pool, check out Marc’s newest research for all the details.