Inflation in 7 Pictures

Markets have declined broadly in the last several weeks. The reason is inflation. In this video, we describe in just 7 minutes with 7 pictures what we believe matters most:

For several years, Fielder has warned in our notes that inflation and volatility were the likely outcome of Washington’s fiscal and monetary policies (under three different administrations, it’s worth noting). Today we appear vindicated in our concerns. Many blame inflation on COVID and Ukraine. Granted, these events are the sparks that ignited the fire. They are not, however, the fuel (i.e.: the secular forces underlying the structural causes – which we explain visually in our video).

Fortunately, there are signs that inflation pressures may be easing – at least in the near-term. We remain concerned, however, by the longer-term threats of inflation based upon the path Washington appears committed to remain traveling down (fiscally and monetarily).

We believe these words from Milton Friedman back in 1980 are equally relevant today:

“Inflation is just like alcoholism. In both cases, when you start drinking or when you start printing too much money, the good effects come first, the bad effects only come later. That is why, in both cases, there is a strong temptation to overdo it—to drink too much or to print too much money. When it comes to the cure, it is the other way about. When you stop drinking, or when you stop printing money, the bad effects come first and the good effects only come later. That is why it is so hard to persist with the cure.” Milton Friedman, “Why Inflation Is Like Alcoholism”

Yours in the Field,

Frank Byrd, CFA Steve Korn, CFA IMPORTANT DISCLAIMER: This note is for educational purposes only. It is not a recommendation to invest in any particular security or strategy, since anything mentioned herein may be completely unsuitable for some investors. Speak with your financial adviser before investing. While the information presented herein is believed to be accurate, Fielder Capital Group LLC (Fielder) makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this email or any attachments. Fielder is under no obligation to notify you of any errors discovered later or of any subsequent changes in opinions. Fielder’s employees are not attorneys or accountants and do not provide legal, tax, or accounting advice. Financial planning and investment strategies have the potential for loss. It should not be assumed that any of the securities, transactions, or holdings discussed will prove to be profitable in the future or that investment recommendations or decisions Fielder makes in the future will be profitable or will equal the investment performance of the securities discussed herein. Investing involves risk, including the potential of complete loss of principal amount invested. Fielder offers no guarantees or promises of success. Nothing herein should be construed as a recommendation to buy or sell any securities. Fielder or its employees may have an economic interest in securities mentioned herein.