The Pomp Podcast - #1000 Inflation Is Out Of Control

Starting point is 00:00:00 What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Today's podcast is episode 1000, and I thought that it would be timely for us to spend some time talking about the most important topic of the current decade, inflation. This episode is brought to you by FTX US. FTX.US is the safe, regulated way to buy and sell Bitcoin and other digital assets. You can trade crypto with up to 85% lower fees than top competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees either. FTX.us is also the only leading exchange that supports both Ethereum and Solana NFTs.

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Starting point is 00:02:46 has recurring revenue. Sign up at pipe.com slash Pomp. Again, pipe.com slash Pomp to start trading today. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. this podcast is for informational purposes only. Inflation in the United States was reported at 8.6% this morning. This is the fastest year-over-year growth in over 40 years. The most concerning part of this report is that economists and market analysts believe that

Starting point is 00:03:30 inflation had peaked in March at 8.5% and was going to start trending downward in April and May. We saw 8.3% in the April report, but the May number surprised these experts to the upside. Inflation hasn't peaked and is continuing to accelerate higher. There is plenty of debate on why inflation is occurring. Is it undisciplined monetary and fiscal policy? Is it supply chain disruptions? Is it the Russia-Ukraine conflict? The economy is a complex machine, so each of these situations likely plays a role.

Starting point is 00:04:01 Rather than debate how we got here, we need to be focused on what we can do moving forward. The average American family is getting decimated financially right now. The cost of eating food at home has increased 11.9% over the last 12 months. Gasoline is up nearly 50% in the same timeframe. That is almost impossible for a family to withstand, especially when wages aren't growing at the same rate. But this data is not telling the full story. Take gasoline as an example.

Starting point is 00:04:28 Prices have doubled in the last 18 months. If you look at shelter, it is being reported at a 5.5% annual increase. That doesn't make a lot of sense though. Rents are up more than 15% nationally and real estate is up more than 20%. The lower official number is the result of methodology that doesn't accurately reflect reality. Speaking of methodology,

Starting point is 00:04:51 many people may not realize that the last time inflation was this high in America, the methodology and calculation of the CPI metric was changed. In layman's terms, CPI was historically calculated by simply measuring the increase in price of various goods over time.

Starting point is 00:05:05 If an item cost $1 a year ago, and now it costs $1.10, the inflation reading would be 10%. Starting in 1980 and numerous times afterwards, the CPI metric began to change as the Bureau of Labor Statistics attempted to more accurately measure inflation. These changes included an assumption that people would stop buying expensive items during high inflation and swap them out for lower cost items. There is also a focus on incorporating changes in quality into the calculation. Regardless of whether you think these changes are good or bad, it is hard to see a world where the average American family is only experiencing the numbers that are being reported officially. There are other measurements of inflation that we can look at. Truflation is

Starting point is 00:05:48 a private market attempt to more accurately measure inflation, and they are reporting just under 11% over the last 12 months. This doesn't mean they are right, but it does mean that they are showing different numbers than the official metrics. This brings me to my last point. Wages in America have failed to keep up with the historic levels of inflation. In fact, the inflation adjusted average hourly earnings of American workers have been negative for more than a year. The cost of goods and services are increasing while wages are not keeping pace. This is disastrous for millions of families. These folks don't want to take over the world. They simply want to build a life of happiness and financial security for their loved ones. Without the right

Starting point is 00:06:28 education, the bottom 45% of Americans get financially damaged during these high inflation times. They have no investable assets and then live with 100% of their life savings in U.S. dollars. The Federal Reserve is backed into a corner now. You have Q1 GDP contracting. Inflation hasn't subsided even though the Fed has been increasing interest rates and conducting quantitative tightening. They don't have many more options other than to simply put their foot on the gas. The Fed could try to accelerate the interest rate increases, both in speed and severity, along with accelerate quantitative tightening. I'm not sure that they will do it, but there aren't many other avenues to pursue. If the Fed does nothing, the real situation on

Starting point is 00:07:10 the ground is not going to get any better for the average American. Inflation reports may start to look like numbers are falling, but much of that will be due to the base effect of increasing inflation starting last summer. People need help. Undisciplined monetary and fiscal policy created this mess. We just have to be careful that a continuation of bad decision-making doesn't create an even worse situation. I hope each of you has a great day, and I hope that you enjoyed these episodes. Inflation is one of the most important topics of the current decade, and for episode 1,000, I thought it was the perfect thing for us to cover. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple,

Starting point is 00:07:50 Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to palmscryptocourse.com to learn more, and I'll meet you guys for the next episode.

The Pomp Podcast - #1000 Inflation Is Out Of Control

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