How to Gain from This Massive, Hidden Inflation Driver

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of Nomi Prins and her team of global experts, including regular contributing editors Eoin Treacy and Lau Vegys. You’ll find all our issues [here](. And if you have questions or comments, shoot us a note anytime [here]( or at feedback@rogueeconomics.com. Maria’s Note: Today, we hand the reins to colleague Andrey Dashkov. Andrey shines a light on a hidden inflation driver… One you might recognize if you follow our editor Nomi Prins’ work closely. It’s at the heart of one of the [key investment themes on Nomi’s radar]( – what she calls the “New Energy” megatrend. Read on for more from Andrey on what this hidden inflation driver is… and one way you can protect your portfolio. --------------------------------------------------------------- How to Gain from This Massive, Hidden Inflation Driver By Andrey Dashkov, Analyst, Casey Research [Andrey Dashkov] Prices are soaring due to inflation… By now, I’m sure you’ve felt the effects on your wallet. But one thing is critical for your understanding of where inflation is headed next. It’s a massive, hidden inflation driver… and it’s up 155% in the last year alone. You won’t find it on the front page of popular financial networks… In a moment, I’ll show how you – as a smart investor – can profit from it. But first, some background… Recommended Link [New Law Could Impact 330 Million Americans]( [ad_img]( Self-proclaimed socialist Bernie Sanders called it… “The most consequential piece of legislation since the 1930s.” Unfortunately, according to the Wall Street Journal, most people are unprepared for what’s coming. By the time you see this message, this bill may already have become law. This means you don’t have much time to prepare. [Click here to get the details and see one simple move you can make now to protect yourself.]( -- This Critical Inflation Driver Gets No Mainstream Coverage The inflation driver I’m talking about rose almost two-and-a-half times as fast as fuel oil last year. Fuel oil was up 59.3% compared to its November 2020 level, according to the U.S. Bureau of Labor Statistics. But while we’ve heard tons about the rise in fuel prices, we’ve heard very little about how the European Emissions Allowance soared by 145% between November 2020 and November 2021. For those who don’t know, the Emissions Allowance is a right to emit one tonne of carbon dioxide equivalent. If you buy it, you can put one tonne of greenhouse gases into the atmosphere. Some companies get them for free, while others bid for these allowances through auctions. So the price is influenced by the market, as well as governments. [Featured: America’s Next Crisis: Buried on page 314 of Pelosi Bill?]( If you have an allowance but don’t need it anymore, you can sell it to someone who does. Since these allowances can trade freely, their price is set by the market participants. And over the past year, as of writing, the European Emissions Allowance price is up 155%. [Chart] Think of this allowance as: “How expensive is it to emit greenhouse gases?” Businesses must decide how much they would pay to emit one tonne of CO2 equivalent… without damaging their bottom lines. And emitting one metric tonne of carbon dioxide equivalent has become almost three times more expensive over the past year. This is a sign of the things to come… As the world is moving toward its “green” goals of achieving net zero emissions, both governments and investors will continue making it more difficult to emit greenhouse gases. The companies that want to continue doing so will have to pay because emissions regulations, like the European Emissions Allowance, are likely to come sooner or later to the U.S. Sixty-nine countries use it as of writing, and it’s estimated to be the most effective way of reducing emissions. Senate representatives from Oregon and Rhode Island have already publicly supported this method. I think that this year, the cost of emitting greenhouse gases can add another 10-15% as the post-pandemic “green recovery” accelerates. I would also expect carbon pricing to become a more widely discussed topic in the United States… because steel is one of the biggest greenhouse gas emitters. And the U.S. is the world’s fourth-largest producer of crude steel… Recommended Link [iPHONE WARNING: Obsolete?]( [image]( Why is Jeff Brown throwing away a perfectly good $1,000 iPhone? According to him, Apple is about to make a critical announcement that will send shockwaves through Wall Street. [If you own a smartphone, click here now…]( Because this is guaranteed to affect you. HINT: The iPhone days are coming to an end. [Click here now.]( -- Carbon Will Create Long-Term Inflation Unless the technology of producing steel changes, manufacturers will be left with few options but to buy the right to emit these gases. But emissions are becoming more expensive… which means that steel producers could start passing that cost along to consumers. In other words, costly carbon emissions will result in higher steel prices. If you apply the same principle to almost any industry, you end up with the same conclusion: higher emissions costs will likely push up the price of the product. And I don’t see any way emissions prices could go down, while keeping with governments’ climate goals. [Featured: BUY ALERT: Free Ticker Symbol Disrupting $867 Trillion in Capital Markets]( So we’re looking at a megatrend that could create inflationary pressures for most product groups… Forget about higher wages or shaky supply chains… It will become more and more costly to be in a “dirty” business, at least as far as carbon emissions are concerned. Recommended Link [Breaking: 5G rollout delayed due to potential flight cancellations]( [image]( Geotech investor Dave Forest issued a warning about a delay in the 5G rollout. Anyone who owns a cell phone needs to pay attention. The 5G-C Band service near airports could cause instrumentation interference and flight cancellations. If you own a cell phone, then mobile service providers hope you never get to see this video that could go viral. But you’ve got to see what this man discovered and what it means for phone users in the weeks ahead. [Click here.]( -- What You Should Do to Get on the Right Side of This One way of protecting yourself against this “carbon inflation” is looking at companies with little exposure to carbon in the first place. An ETF called iShares MSCI ACWI Low Carbon Target ETF (CRBN) looks to track a group of companies whose carbon exposure is lower than that of the general market. These could be less exposed to the cost pressures of expensive emissions rights. Pay attention to this space and position your holdings accordingly. This “hidden” inflation driver could create a massive, decades-long trend. Good investing, [signature] Andrey Dashkov Analyst, Casey Research --------------------------------------------------------------- Like what you’re reading? 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