In my role as executive editor, I subscribe to dozens of newsletters, wire services, trade journals and news-bulletins. They roll into my e-mail box each day like an eight-hour-long avalanche.
Usually, I just open the ones that happen to catch my eye. One was this recent headline from a MarketWatch.com bulletin that said, “Dow closes at highest level since December 2007.”
My first thought was that the bulletin should have said: “Dow closes at highest level since December 2007 – despite faltering economy, stubborn unemployment, accelerating inflation and the highest level of uncertainty we’ve seen in decades.”
I guess they couldn’t fit all that into the subject line box.
My second thought was that Martin Hutchinson was right – again.
You see, for the last couple of years the administration in Washington and the so-called experts on Wall Street have repeatedly told us that inflation isn’t a problem. They continue to insist that the bailout plans and easy-credit policies that were used to end the financial crisis have yet to ignite the rise in prices that you and I refer to as “inflation.”
However, in the Aug. 21 Private Briefing, Martin completely dismissed this Pollyanna point of view. There is inflation, he said. In fact, it’s staring us right in the face – as a soaring stock market.
According to Martin, the “Real Dow” should be much lower.
Another Stock Market Bubble
With so much economic uncertainty – read that to mean, so much “risk” – there’s no way stocks should be zooming like this, Martin said. The fact that they are is proof of a cheap-money-fueled “asset bubble” – a form of inflation, he explained.
The Permanent Wealth Investor editor also predicted that U.S. stock prices would continue their advance – especially if the U.S. Federal Reserve appeared willing to add additional stimulus.
And as the MarketWatch.com bulletin illustrated, that’s precisely what happened.
Here’s the thing: Now that “QE Forever” has arrived, this inflationary surge is about to get much, much worse.