I was driving by a gas station the other day and realized that regular gas was $3.60/gallon here in Florida. That is about the highest I’ve ever seen it in February.

It is odd, because I know that not only are Americans driving less, but we are also producing almost two million barrels of oil more each day. We use less, produce more, and yet the price of oil sits just under $100/barrel for West Texas Intermediate.


Things don’t get better at the grocery store. Eggs, chicken, beef, coffee… they’re all up in price.

I just received my auto insurance renewal. I have two teen drivers, so I understand that my rate is astronomical anyway, but that didn’t prepare me for what I saw. My annual premium went from $6,600 to $8,500.

I called and was told that it had nothing to do with the drivers. We all have spotless records. It was entirely due to uninsured motorists.

My daughters’ school sent the tuition bill for 2013-2014 and was thrilled to let us know that tuition went up by only – only – 4%.

[%= :subscriberName(E, Survive & Prosper Reader) %]… say “Hi!” to inflation. You’re no doubt already well acquainted. But there’s something you need to know about this guy…

He’s not the “good” kind of inflation. He’s not driven by more people choosing to buy something. Nope, this is a monetary event. The Fed is desperate to create inflation with the intention to motivate spending, hoping it will spur the economy.


It won’t.

No matter how much the Fed tries, our main economy is stuck in a deflationary trend, not an inflationary one.

“But you just reminded me about the inflation all around us! What gives?” I hear you ask.

Think of it this way: we have slack demand for goods and services, which leads to falling production and therefore falling employment (high unemployment). This also means we have an overabundance of workers, so income falls.

And money? No one wants it… or at least, fewer people want to borrow it. This means that interest rates are exceptionally low. The Fed is trying to make credit as easy to get as possible, but those who are credit-worthy have no interest. The outcome is interest rates that don’t even match the rate of inflation.

That’s all pretty deflationary.

What I’ve just described can be thought of as the worst of both worlds. We pay higher prices for necessary goods, but we earn less on both our labor and our savings.

The reason we’re stuck in this pattern is because the central banks of the world are trying to change the natural cycle of events.

Typically, economies will go through a boom period that is marked by rising consumption, rising prices and rising levels of debt. This cycle becomes self-fulfilling, with most people assuming the good times will go on forever. The idea of risk is thrown out the window.

Of course, it doesn’t go on forever. Instead, asset prices come crashing down, demand falls off and all that is left is a bunch of debt. This leads to a conservative period where debt is paid down or written off, demand is weak and money is hard to come by.

We had the risk-on period, now the Fed and other central banks want to erase the whole risk-off period. Unfortunately we can’t just wish it away.

The debts are still with us, incomes are down and interest rates almost don’t exist. For all the Fed’s efforts, what it’s really doing is killing our standard of living by draining away what savings and income we have.

You don’t have to just sit back and quietly take it. You can fight back. Start by building as many income streams as you can.




Ahead of the Curve with Adam O’Dell

What Soybeans Say About Inflation

It was at one of Harry’s and Rodney’s Demographics School conferences that I first saw them speak in public. Naturally I had read several of their books, but I’d wanted to see the show in person.



The Truth Exposed: The Future of the Markets & Your Wealth

During this ground-breaking FREE presentation, controversial economist and bestselling author Harry Dent will deliver the hard truth about our economy that you'll never hear in the mainstream media... Read More>>
Rodney Johnson
Rodney works closely with Harry to study the purchasing power of people as they move through predictable stages of life, how that purchasing power drives our economy and how readers can use this information to invest successfully in the markets. Each month Rodney Johnson works with Harry Dent to uncover the next profitable investment based on demographic and cyclical trends in their flagship newsletter Boom & Bust. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. Along with Boom & Bust, Rodney is also the executive editor of our new service, Fortune Hunter and our Dent Cornerstone Portfolio.