March 4, 2026
Why You Need to Fear Inflation Now!
Dear Subscriber,
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| By Sean Brodrick |
Boy, we are screwed. Screwed like a 9-tailed cat in a room full of rocking chairs.
And sure, there are plenty of things wrong nowadays. Things that have you wondering if it’s “Whiskey O’clock” all day long.
But what’s screwing us now is inflation.
I don’t have to tell you how bad inflation is — every trip to the grocery store hammers that home.
But it’s about to get a lot worse.
I’ll tell you what’s about to push us into the Woodchipper of Consequences.
First, let’s deal with the paint-lickers on Fox News who’ll insist inflation is coming down. No, it ain’t!
Inflation was coming down until April of last year. Then it started heating up in a hurry.
Personal Consumption Expenditures — the Federal Reserve’s favorite inflation measure — were most recently clocked at 2.9%.
What happened in April? That was “Liberation Day,” when President Trump slapped tariffs on all sorts of imported goods.
Who ends up paying the tariffs? Consumers!
Tariffs are inflationary because price hikes get passed along to consumers.
All those “expert” eggheads who said inflation would have a one-time effect? WRONG!
The nonpartisan Tax Foundation found that the tariffs amounted to an average tax increase of $1,000 per household in 2025, with that figure rising to $1,300 in 2026 if policies remain in place.
Other estimates are higher.
Heck, the National Taxpayers Union figures it’s DOUBLE that — more like $2,048 per household.
Still, 2.9% is livable, right?
What if I tell you that one of the biggest disinflationary forces in America is about to go away?
I’m talking about low(er) energy prices.
Oil’s Not Well
Oil and natural gas prices fell for most of last year.
That helped offset inflation, including the inflation driven by rising electricity prices from AI data centers (don’t get me started!).
You can see that oil and gas prices as a group started tumbling in January of last year and detracted from inflation all the way through January of this year, the latest figures available.
Heck, gasoline was down 9.8% year over year. That was a BIG help in the fight against inflation.
But then along came Operation Epic Fury, the joint U.S.-Israeli attack on Iran, which started this past weekend.
Iran responded by lashing out at its oil-and-gas-rich neighbors. You can find videos all over the web of pipelines and refineries blowing up.
And not just oil.
Qatar halted all production and exports of liquefied natural gas (LNG) after its key industrial facilities were slammed by Iranian drones.
European natural gas prices surged by over 50% immediately following the announcement.
The U.S. is natural-gas rich, so we’re insulated from that development … for now.
But the Iranians also closed the Strait of Hormuz.
Roughly 20% to 25% of the world’s total oil and gas supply transits through this narrow passage daily.
So, of course, oil and gas prices are going up. And yeah, that’s going to be inflationary.
There doesn’t seem to be a plan for ending this conflict.
I expect, at some point, President Trump will declare victory.
Let’s hope cooler heads prevail.
Will Inflation Stick?
But it’s only March! The BEGINNING of March.
What are the odds that we’ll have more trouble in the Middle East?
I’d say those odds are higher than we’d like. And oil and gasoline prices — and inflation — will be, too.
How high will inflation go?
That’s the real mystery.
The rule of thumb is that a sustained $10 rise in the price of a barrel of oil adds roughly 0.4 percentage points to inflation.
So, if oil rises to $70 … $80 … $90 … that can put the hurting on your wallet pretty quickly.
Oil prices might not stay high. But inflation can be sticky as prices are passed through.
Investing for Chaos
As an investor, you want to hold stocks and industries that can pass along inflation the easiest.
My pick would be utilities.
Customers can't easily avoid using utilities.
Rates are regulated, but utilities generally get approval to pass costs through.
An easy way to play utilities is the State Street Utilities Select Sector SPDR ETF (XLU).
You can see utilities have been on fire since early February. Maybe Mister Market saw inflation coming.
It’s not too late to get long.
That kind of breakout should take the XLU to at least $68. That’s approximately 44% higher than it is today.
And if inflation heats up for longer, the XLU could really shine and go much higher than that!
All the best,
Sean
P.S. Obviously, gold is another hedge you should have at the moment. But if you want a double hedge, you’ll want to hear what my colleague, Chris Graebe, just found.
Not only is this miner unlocking a $60-billion-per-year fortune. It is still pre-IPO.
That means it provides a hedge — gold and other metals. But it also isn’t at the whim of the stock market.
And if you paid attention to the market this week, you’ll already understand why that’s so valuable right now. I’ll let Chris explain it all.
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