Twelve investors have been sounding increasing inflation alarm bells throughout 2021, with half of the investors’ warnings coming in October 2021. Prepare for Inflation, as Michael Burry said, and what could be coming in 2022!
With the historic amounts of fiscal and monetary stimulus (QE or money printing) being pumped into our economy, it’s no wonder we’re seeing inflation rear its ugly head. It seems like the deflationary forces of technological innovation and an aging population are losing out to the inflationary forces of supply chain issues, labor shortages, and increasing wages.
Video chapter contents:
-12 Investors Drumming Up Noise About Inflation
-Paul Tudor Jones
-Ominous Foreshadowing and Preparing For What’s Coming
Personal Consumption Expenditure (PCE) inflation jumped from 2.03% in August 2021 to 5.08% in September 2021! So much for “inflation being transitory” as it clearly is remaining here at heightened levels for the foreseeable future and is very top of mind for many investors and business leaders.
At the 2021 Berkshire Hathaway annual meeting, Warren Buffett warned “we’re seeing very substantial inflation.” Over the years Buffett has warned about the dangers of inflation, where he considers it a “gigantic corporate tapeworm” that eats up companies’ cash and erodes investors’ real returns.
Carl Icahn warned, “Inflation is taking hold in a bad way. I really think there will be a crisis the way we’re going, the way we’re printing money, the way we’re going into inflation.” And Icahn also thinks that rising prices could precipitate a market crash, which is super ominous if that were to come to fruition.
Elon Musk reacted to a tweet from Cathie Wood in saying, “I don’t know about long-term, but short-term we are seeing strong inflationary pressure.”
Jack Dorsey shared possibly the most dire warning where he believes “hyperinflation is going to change everything. It’s happening” in the US and soon it will happen throughout the world. Arguably, Dorsey is in one of the more extreme positions on inflation since hyperinflation means that prices are rising more than 50% per month.
Right now we’re within the range of walking inflation where prices might rise between 3-10% per year after consumers had experienced creeping or mild inflation over the last decade.
What I’m going to do is continue studying famous investors like Warren Buffett and Guy Spier as to how they are preparing for an increasingly inflationary environment. I plan to read Buffett’s Berkshire Hathaway annual letters to learn what lessons he has shared about inflation.
I’ve heard some people are prioritizing holding onto real assets like real estate or commodities that maintain their value during heightened inflation. I leave it up to you to decide how you want to best prepare for more inflation!
If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.
I look forward to making more investor friends! Add me on Instagram: michellemarki