It’s like pouring gasoline straight onto a campfire…
Then being shocked when the blaze rages into an inferno.
You’d have to be a nut to do it in the first place.
And a fool not to expect what comes next.
That’s exactly what the American Rescue Plan did.
In March 2021, President Biden and the Democrats passed a $2 trillion stimulus package.
In this case, “stimulus” meant sending Americans $1,400 checks in the mail.
No work was required to get one of these checks — no forms to fill out.
They didn’t even need to leave the house.
All they needed to do was cash a check.
The government was paying Americans to go out and spend money.
That new refrigerator you had your eye on? Treat yourself!
Always wanted to buy a fancy watch? Now was your chance.
Want to try your luck trading cryptocurrency? It’s on Uncle Sam.
Now, if I’ve learned one thing in my many years…
It’s that there’s no such thing as a free lunch.
I mean — the government playing Santa Claus and giving out money?
There had to be a catch.
There sure was too.
And it was a doozy…
On the day Trump left office in January of 2021, inflation was just 1.9%.
Since then, it took off like a rocket, reaching 9.1% … the highest rate in 40 years.
Source: House Committee on Ways and Means.
And it all started around the same time Washington pumped $2 trillion into the economy.
When you have too many dollars chasing too few goods — you get inflation.
That means watching the value of your savings account melt away…
Like an ice cube sitting in the hot summer sun.
Inflation is already wreaking havoc on ma and pa investors all across America.
You can see it in the grocery store … at the gas pump … and especially at the car dealership.
My new car lease payment is twice what I used to pay.
Fortunately, there’s a practical solution to this problem…
Stay fully invested in great companies.
Don’t sell out and go to cash.
Because as long as your money’s invested in great companies, it will keep growing.
Businesses can raise prices to cover the higher costs they pay due to inflation.
Those rising prices can be great news for corporate profits…
Which pushes share prices up even further in the long run.
It’s not a perfect solution.
But until we see some sanity in Washington or falling prices at home, it’s the best we’ve got.
Founder, Real Talk