Billionaire investor Bill Ackman just issued a warning about the future of inflation. But don’t worry, it’s not all bad news, and you will see why during this video. For background, Ackman recently gave a rare, full length, sit down interview. While this interview touched on a wide range of topics, it was Ackman’s comments around inflation that really caught my attention. You are going to want to hear what he had to say. In this video, we are going to cover Ackman’s thoughts on the economy, why inflation is here to stay, and arguably most importantly, how you can protect your money from the devastating impacts of high inflation. Let’s get into it.

In order to prevent the US from slipping into deflation, the US federal reserve established a target annual inflation rate of 2% in the year 2012. For much of the next 8 years, the Fed struggled to get inflation up to that 2% target. As a result, many economists believed that inflation would never again be a problem in the United States. Oh boy how things can change and they definitely changed in a major way in 2020.

To understand why Ackman thinks inflation is here to stay, you have to understand why inflation occurs. In simple terms, inflation happens when the demand for goods or services outstrips supply. While that may sound like a complicated concept, trust me, it’s actually very simple. Here, we have a supply and demand graph. This line here represents the demand for a particular good or service

In this example, let’s say we are talking about used cars. The demand line represents the number of people looking to purchase a used car, and importantly, how much those buyers are willing and able to pay. Here, we have the supply line. This supply line represents the number of used cars available to be purchased at any given time. The point at which our two lines here cross represents the price for that good or service. So in our example, the average price of a used vehicle.

In 2020 and 2021, the US government and Federal reserve took drastic steps to prevent a widespread economic collapse. This involved sending cash directly to households, boosting unemployment benefits, and pausing required payments on certain types of debt. At the same time that all of this cash was getting pumped into the economy, the Federal reserve slashed interest rates to historically low levels. These lower interest rates made it less expensive for people and businesses to borrow money to make purchases.

Going back to our example with used cars, these actions resulted in an increase in demand for used cars. People had more money in their bank accounts to be able to spend to make the purchase. Additionally, the lower rates made it less expensive to purchase a car using a loan. These factors led to an increase in demand, illustrated by our demand line here getting pushed to the right

At the same time, automotive manufacturers were suffering through supply chain issues that limited their ability to produce new cars. Since there were less new cars available, people held on to their current car longer, resulting in less supply of used vehicles available for sale. Less supply means our supply line gets pushed to the left. Notice how now the two lines cross at a much higher price pointy…(read more)

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Bill Ackman: How to Get RICH During Inflation (RARE New Interview)

Inflation has become a constant topic of discussion among investors and economists lately. With the global economy facing unprecedented challenges, understanding how to navigate and even benefit from inflation is of utmost importance. One person who seems to have figured it out is billionaire hedge fund manager Bill Ackman.

In a rare new interview, Ackman shared his insights and strategies for making wealth during inflation. Known for his successful investments and financial expertise, Ackman’s advice carries weight and provides valuable guidance for those looking to thrive in uncertain economic times.

One of the key takeaways from Ackman’s interview is the importance of understanding inflation dynamics and recognizing it as an opportunity rather than a threat. Unlike many who fear inflation due to rising prices, Ackman believes that it often translates into increased asset values. He emphasizes that using smart investment strategies, combined with strong fundamental analysis, can pave the way to substantial gains during such times.

Ackman acknowledges that market volatility and uncertainty can be a challenge during inflationary periods. However, he suggests approaching investments with a long-term perspective and focusing on quality companies with solid balance sheets. He advises investors to look out for companies that possess pricing power, meaning they have the ability to raise prices in response to inflation without losing significant customer demand. Companies with strong brands or dominant market positions often possess this advantage.

Another strategy shared by Ackman is to consider investing in businesses that benefit directly from inflation. These could include companies in sectors such as commodities, real estate, or infrastructure. Such investments can act as a hedge against inflation, as rising prices tend to boost the value of these assets over time.

Ackman also emphasizes the value of diversification. He suggests spreading investments across different asset classes and geographies to mitigate risk. By diversifying, one can balance potential losses with gains in other areas. Additionally, he encourages investors to stay well-informed and educated, as this knowledge can be a valuable tool during inflationary times.

Lastly, Ackman advises against making hasty decisions and succumbing to short-term market fluctuations. True wealth creation, according to him, comes from remaining disciplined and sticking to a well-thought-out investment plan. Patience is key, as inflationary periods can be volatile and require a long-term perspective to fully capitalize on potential gains.

Bill Ackman’s rare interview provides invaluable insights into how to thrive during inflationary times. By carefully analyzing market dynamics, identifying businesses with pricing power, and investing in inflation beneficiaries, individuals can position themselves for financial success. Ultimately, the key lies in staying informed, remaining patient, and executing investment decisions with discipline and a long-term vision.