Inflation is a bit out of control.
Just yesterday, we learned wholesale prices are through the roof at 8.6%, and show no signs of cooling off any time soon.
“Mostly dormant for decades, inflation has returned to the United States this year. The economy’s strong rebound from the 2020 coronavirus caught many businesses by surprise. Their scramble to meet unexpectedly strong demand has created shortages of labor, raw materials and goods and snarled traffic at ports and freight yards. The result has been higher prices, and the supply squeeze is expected to last at least well into 2022,” says Reuters.
Then, this morning, we learned the consumer price index was up 6.2% year over year. That’s the highest it’s been in about 31 years. Strip out food and energy, and the number was 4.6% — the fastest gain we’ve seen in about 30 years.
Meanwhile, Fed Chairman Jerome Powell and Treasury Secretary Janet Yellen still believe inflation is just temporary. From here, they see inflation possibly easing in about a year or so.
That’s not even close to comforting at this point.
So, what’s the best way to hedge against rising inflation?
Aside from gold, which is up about $27 to $1,856 at the moment, another way is to hedge with cryptocurrencies, like Bitcoin, which is nearing $70,000. There’s also the ProShares Bitcoin Strategy ETF (BITO), which jumped from about $39 to $44 over the last few days. And there’s the Horizon Kinetics Inflation Beneficiaries ETF (INFL), which we highlighted on October 20.
The INFL ETF reportedly offers protection in inflationary environments.
“Two areas that you’d be pretty hard pressed to argue against being inflationary over the past decade are higher education and health care,” hence INFL’s top holding, pharmaceutical service provider Charles River Laboratories, said the INFL’s co-portfolio manager, James Davolos, as quoted by CNBC in June 2021.
At $31.60 with an expense ratio of 0.85%, the ETF also holds a position in Franco Nevada Corp., ASK Ltd., Texas Pacific Land Corporation, Viper Energy, CBRE Group Inc., and Archer Daniels.
Since the start of October 2021, the ETF jumped from $29.25 to $31.60 – and could push higher along with inflationary threats.
The post With Inflation at 30-Year Highs, Consider These Trade Ideas appeared first on Morningology.
