Inflation is classically defined as an increase in the money supply, but today, even most economists use the term to describe the effect of inflation: a general rise in prices.
On that basis, it's becoming impossible to deny that inflation, an insidious tax on your wealth, is back… bigly.
In fact, the U.S. government is telegraphing, loud and clear, massive spikes in inflation ahead.
As you'll see in a moment, there's likely no stopping it, but you don't have to take it lying down, either – not with the "stock-and-a-kicker" play I'm going to recommend…
This Could Make QE 1, 2, and 3 Look Like Peanuts
Trump has promised to cut taxes, in his words, "massively." On his first full day on the job, he told 12 executives from America's largest businesses that tax rates would tumble from 35% down to 15% to 20%.
That's not all. He's promised to cut taxes for the middle class, all while simplifying the tax code.
But what he hasn't said is how he'll make up for that considerable lost revenue.
Treasury Secretary Mnuchin recently confirmed that Trump's first budget would not bring cuts to big entitlement programs like Social Security, Medicare, or Medicaid.
And true to his unconventional form, the president has talked down the U.S. dollar, saying it was not in America's interest to have such a strong currency.
So, you don't have to be a Nobel prize-winning economist to conclude that Trump has just three options to pay for a growing deficit: printing, printing, and more printing.
The money supply is all but totally certain to get a huge boost from the "Gutenberg," and so inflation is all but inevitable.
And it has been for some time now.
As soon as Trump was declared victor in November 2016, inflation expectations spiked. Five-year forward inflation zoomed from 1.85% to 2.05% virtually overnight. Trump's promises to create or bring back American jobs by dropping trade agreements, slapping tariffs on imports, and calling out China as a currency manipulator "did the job."
It's clear those promises resonated with voters; producing more stuff "at home" sounds warm and fuzzy, and it's supposed to mean more jobs.
But this is the 21st century. A lot of domestic production just can't compete with lower wages and cheap-to-nonexistent benefits offshore. So even if that helps create jobs, the stuff they make is going to cost more.
Then let's see how easily the newly employed can afford what they produce.
As for imports, slapping duties and tariffs on them is also going to boost their prices, perhaps as much as 35% on Mexican imports and 45% on Chinese imports.
It's going to take a lot more than a (quasi-mythical) manufacturing job to make up the difference.
Signs of inflation are moving forward on all fronts, in some of the world's biggest, most important economies.
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.