TIPS is a type of bond issued by the US government that is hedged + designed to protect against inflation. Here’s where human nature comes in to short circuit the design. Watch this video to see what’s causing the losses. And why instead of beating inflation, investors have lost 17% of their purchasing power in this “inflation hedged” US government bond. #shorts #fed #federalreserve #inflationhedge #tips #tipsbond

I was just at the Limitless Expo Financial Freedom conference and saw Joseph Wang @Fedguy12 the Fed Guy speak and got to talk with him 1-on-1. He showed a chart that inflation has flatlined at the stubbornly high between 4% and 5%. And I expect based on the data inflation to remain in this “band” or range for the coming months or even through 2024 and into 2025.

We are not stopping or even slowing down the issue of treasury bills and treasury bonds. See this YouTube short about $1 trillion in treasury bills and balance about to be issued over the coming 2 to 3 months.

Bottom line, there are no shortcuts when we print and create too many US dollar currency units and don’t leap forward the supply of products and services by 30% or 40% per year. Which we are not seeing anywhere near that much growth in the supply of products and services. That’s why sharp economists know the truth that “inflation is always and every time a monetary phenomenon.” (creating too many currency units/new dollars printed.)

The banking crisis still has legs because again let’s ask the question of your and my common sense. Banks have to balance assets and liabilities. Deposits are a liability. Many assets for a bank are US treasuries. Many banks purchased these US treasuries when interest rates were at 2% or 3%. With interest rates between 5% and 6%, the price of these US treasuries is way lower than what the banks purchase them for. That means the banks assets are worth way less than the amount the bank paid to buy those assets. What does your common sense tell you about a bank that has lower value assets and liabilities roughly the same and or getting worse? Does your common sense tell you the banking crisis is over?

article cited:

#bankcrisis #bankcrash #banking #bankingcrisis #bankingcollapse #inflation #inflationnews #inflationdata #morningstar #jeromepowell #useconomy #economy #recession #bonds #bond #treasury #treasurybills #treasurybonds

Find out the keys. Watch this video. #shorts #shortsvideo #shortsyoutube #shortstips #assetbubble

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HOW TO: Hedge Against Inflation

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Inflation Protection… Not so Much – Cost Investors 17%

Inflation is often referred to as the silent thief that erodes our purchasing power over time. As prices rise, the value of our money decreases, making it increasingly difficult to maintain our standard of living. To combat this wealth-depleting phenomenon, many investors seek out inflation protection options to preserve their hard-earned money. However, it seems that these solutions might not always live up to their promises.

A recent study conducted by Freedom-IQ, a prominent financial education platform, revealed that inflation protection strategies might not be as effective as believed. The analysis, which focused on various investment options touted as inflation hedges, revealed disappointing results for investors.

The study compared the performance of traditional inflation protection investments, such as Treasury Inflation-Protected Securities (TIPS) and inflation-indexed bonds, against the actual consumer price index (CPI) inflation rate over a five-year period. It found that these supposedly safe investment vehicles failed to keep up with inflation, resulting in a 17% loss of purchasing power for investors.

The underperformance of inflation protection investments can be attributed to several factors. Firstly, TIPS and inflation-indexed bonds are based on the CPI, which may not accurately reflect real-life inflation experienced by individuals. As the CPI measures a basket of goods and services, it might not fully capture changes in the costs of necessities such as healthcare or education, which tend to rise faster than the average rate of inflation.

Another reason for the inadequate performance of inflation protection investments is the low interest rate environment prevailing in recent years. With interest rates remaining historically low, the returns on these investments have failed to keep pace with rising prices. Investors who rely solely on these strategies might find themselves falling behind inflation, effectively losing their portfolio’s purchasing power.

So, what can investors do to protect their wealth against inflation? The answer lies in diversification and a well-rounded investment approach. While TIPS and inflation-indexed bonds might not guarantee adequate inflation protection on their own, combining them with other assets can help mitigate the effects of rising prices.

One investment avenue that has historically proven effective in hedging against inflation is real estate. Real estate assets, particularly income-generating properties, tend to increase in value over time in tandem with inflation. Additionally, investing in stocks of companies in sectors that perform well during inflationary periods, such as consumer staples or energy, can provide a boost to a portfolio’s inflation hedge.

Another key aspect to consider is the importance of consistently reviewing and adjusting one’s investment portfolio. As economic conditions and inflation expectations change, so should investment strategies. Regularly reassessing the mix of assets and reallocating investments accordingly can help optimize inflation protection.

In conclusion, the recent study by Freedom-IQ sheds light on the often-overlooked reality of inflation protection strategies. While traditional options like TIPS might not provide foolproof protection against rising prices, investors can still safeguard their portfolios by diversifying their investments and staying informed about market trends. By being proactive and adaptive in managing one’s investments, individuals can strive to stay ahead of inflation and secure their long-term financial well-being.