By Kurt Kasun—–The peaceful co-existence between commodity-related investments and most sectors which comprise the broader US Stock indices, is drawing to a close. As inflation tightens its grip over the world economy, US treasuries and stocks (consumer-related, tech, and financials) will suffer while investments in tangible assets will see their gains accelerate higher. I consider the terms “inflation” and “currency debasement” to be largely synonymous. The bottom line is that purchasing power is going to drastically decline. Income and wealth is not going to keep up with rising prices for goods and services for the US consumer. Hard asset investments will emerge as the sole safe haven against the deleterious effects of inflation.

I find it amazing that the majority of pundits and advisors in the financial media are still peddling tech and financial investments. Most of these guys who proclaim commodities are in a bubble are merely trying to persuade their audience to invest in US stocks. “A bet against the American consumer has been a bad bet for 25 years” is a popular refrain. Well, 25 years of living beyond our means to consume is going to have ugly consequences. The government’s highly inflationary and currency-devaluing policies heretofore created asset bubbles, the over-flow of which created a wealth effect that positively impacted consumption and GDP. The problem was that the numbers masked the rot which was occurring in the real economy. Incentives created asset growth and dependency at the expense of investment in this country’s productive capacity in tangible goods. Austrian economists refer to this as mal-investment. Inflation is the inevitable outcome, even in a US-centric world. But things have changed. We are on the brink of massive global inflation, the likes of which the world has never seen. In the recent edition of The Economist magazine an article titled “Inflation’s Back” observes, “Loose money in American and rigid exchange rates in emerging markets are a perilous mix.”