Inflation, Taxes, and China’s Re-COVID

Rickards: More inflation is coming… April 08, 2022 [UNSUBSCRIBE]( | [WEBSITE]( [Altucher Confidential] “With the latest lockdown, you can expect further supply chain disruptions. China’s policies are a drag on global growth and represent another disruption to global supply chains.” [HERO IMAGE] Inflation, Taxes, and China’s Re-COVID By Jim Rickards Stock Market Death Date: 10X bigger than 2008?! [Read more here...]( Take a look at this man. In 2006 (a full two years before the 2008) financial crisis he warned our intelligence communities of a brewing financial crisis… And his full thesis was so in depth that it appeared in the CIA Journal Studies in Intelligence. He even supplied the Treasury with a plan for averting the crisis called Proposal To Obtain And Manage Information In Response To Capital Markets Crisis. But no action was taken. Now he is back in Washington releasing a new [startling prediction]( directly to the American public. If he’s right, that means he just revealed the “death date” for the entire U.S. stock market… And it’s coming sooner than anyone thinks. [Click Here Now to See Why The Next Stock Market Collapse May Already Be Here.]( As the geopolitical situation gets more tense, the hens are headed home to roost — namely with higher prices at the gas pump, grocery store, and, well, everywhere. Today, for that reason, we invite geopolitical genius Jim Rickards to unpack the current situation… and show you how to prepare for the worst of it. Check it out below. Inflation, Taxes, and China’s Re-COVID Jim Rickards Inflation is not a guessing game anymore; it’s here. Every time you buy gas at the pump or groceries at the supermarket or book a plane ticket, the price increases are staring you in the face. The problem is that inflation cannot be isolated. It’s not limited to what you pay to fill up your car, for example. Truckers have to pay the same higher prices for diesel fuel, which add to transportation costs and to the final prices of delivered goods. It’s a clear example of the ripple effect. That much is clear. What is less clear are the thousands of ways that inflation hurts you that are invisible. The most important of these is that inflation is a tax. The government borrows dollars, and you earn dollars. Taxation is one way that governments take money from citizens to pay off government debt. But taxes are unpopular and hard to get approved by Congress. Inflation works much better. It reduces your real income since the dollars you earn are worth less. And it reduces the government debt because the money the government owes is easier to repay for the same reason – the dollars are worth less. So inflation works the same as a tax increase except that you can’t see it and Congress doesn’t have to lift a finger. Nice, right? Attention! Before You Read Any Further… [Click here for more...]( it’s James. Before you read any further in today’s issue, an urgent situation needs your immediate attention. If you don’t plan on claiming this upgrade to your Altucher’s Investment Network subscription, you’re missing out on a huge opportunity. Right now is your chance to grab one of the biggest (and most valuable) upgrades our company has ever made to a newsletter. I’m taking Altucher’s Investment Network to an entirely new level and I’d hate to see you left behind. [To see how to claim your upgrade, just click here now.]( Sleight of Hand Another damaging effect of inflation has to do with the difference between nominal income and real income. Nominal income is the amount of money you make measured in dollars. Real income is the amount those dollars are actually worth when adjusted for inflation. For example, your wages might have gone up 5% (that’s the latest annualized wage increase as of April 1, according to the Labor Department). That’s a nice gain, but with inflation of 7.9% (also the latest data we have), your real wages actually went down 2.9% (5.0 – 7.9 = -2.9). You got a raise in nominal terms, but you took a pay cut in real terms. Many people are not familiar with this simple formula for converting nominal gains to real gains. But everyone is familiar with how long their paycheck lasts. More and more Americans are finding that by the time they pay the rent or mortgage, put gas in the car, buy groceries and pay some medical bills, they’re out of money. They’re waiting for the next paycheck. There’s nothing left over for a dinner out, a new pair of shoes or a visit with family members. The economic consequences of this decline in real incomes are huge. If you buy coffee at the grocery store instead of going to Starbucks or go jogging instead of paying a visit to the gym, then service and retail industries all around the country start to suffer. This can be followed by layoffs at some of those outlets and even more cuts in discretionary spending as the laid-off workers tighten their belts. China Locks Down 26 Million in Shanghai A lot of the inflation today comes from the supply side, not the demand side. It has to do with supply chain disruptions and the cascade of consequences from the economic sanctions because of the war in Ukraine. None of these situations will show any improvement in the short run. They may actually get worse, as the situation in China suggests… China is currently experiencing a severe outbreak of COVID. The reason for this is China’s badly flawed and ineffective zero COVID policy. When a case does emerge, they immediately shut down the surrounding area, quarantine everyone, test everyone, trace any contacts and send the infected to isolation camps for two weeks or longer. When an outbreak spreads, they will lock down entire cities and ban all transportation to or from that city. This is happening in Shanghai now. The entire city of 26 million has been shut down. Citizens are being ordered to stay inside. Visits outside for food and water are severely limited. Shanghai is one of the largest cities in the world and is adjacent to Ningbo, one of the largest container cargo ports in the world. With the latest lockdown, you can expect further supply chain disruptions. China’s policies are a drag on global growth and represent another disruption to global supply chains. There’s nothing the Fed can do to stop the inflation because it’s coming from the supply side, which the Fed has no control over. Higher interest rates won’t increase the supply of oil. The Fed has no mandate to drill for oil or discover natural gas resources. The Fed is essentially helpless. The bottom line is there is practically only one way for the Fed to stop the inflation. That’s by raising rates until they cause a recession. It’s a fair question whether the cure (recession) is worse than the disease (inflation). Since this is the incompetent Fed we’re talking about, we may even get both inflation and recession. I’ve published my latest prediction — and what you should do about it — at the link below, but act fast, my publisher is taking it down at midnight Monday. [Click here to check it out here before it’s too late.]( Regards, Jim Rickards for Altucher Confidential **Urgent Note From Jim Rickards – Response Is Requested** [Click here for more...]( just made a [massive change]( to Strategic Intelligence. This is one of the biggest changes to a newsletter in the history of our business… As far as I know, nothing like it has been done before. What’s going on? In short, I’m adding 3 exciting new additions to this all-new “Pro level” of Strategic Intelligence. That’s why — for a very limited time, until the timer below hits 0 — you’ll be able to [upgrade to this new “Pro level” by clicking here.]( Seriously. [Just click here now to see how to claim your upgrade.]( Once the timer hits 0, however, it’ll be too late… you’ll miss out. I’d hate to see you left behind. Subsribe To My Podcast [The James Altucher Show]( [The James Altucher Website]( [Subscribe With YouTube]( [Subscribe On Messenger]( [Subscribe With iTunes]( [Connected on LinkedIn]( Add AltucherConfidential@email.threefounderspublishing.com to your address book: [Whitelist Us]( Join the conversation! Follow me on social media: [Facebook Group]( [Facebook]( [Twitter]( [Pinterest]( [Instagram]( [Three founders Publishing]( To end your Altucher Confidential e-mail subscription and associated external offers sent from Altucher Confidential, feel free to [click here](. 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