Remember, the only choice is optimism, the pessimists never get it right.

Inflation was back in the news as the apocalypse du jour of the week. When the consumer price and the producer price indexes were reported last week and the numbers were higher than the pros had guessed, the eruption of the talking heads was predictable.

The attached article, “Transitory Inflation is Just Part of the Covid-19 Recovery” offers a good explanation about the nature of inflation. We must remember, June 2020 looked a whole lot different than June 2021. Unemployment was off the charts, companies shut down and supply chains needed much more than one or two missing chain links.

So, when we look at June 2021’s numbers, it’s an “apples to oranges” comparison. Last year’s numbers were barley off the bottom and this year’s numbers are reflecting a very strong emerging economy with declining unemployment and a labor shortage.

One of the bedrock principles of economics is the law of supply and demand. If there’s lots of demand and little supply, prices go up and, conversely, lots of supply and little demand, you would expect and see prices decrease.

So, when we compare this year’s numbers with last year’s and with supply chains being rebuilt and restructured creating shortages, inflation is temporary.

Here is my definition of inflation: “How much money do I have left at the end of a month or how much month do I have left at the end of the money?”

Over the next couple of months, I will be integrating some improvements and new capabilities to our firm. Please stay tuned as we introduce these improvements. And, should you have any suggestions, please do not hesitate to suggest them.

As always, should you have any questions or wish to meet with or talk with me, please don’t hesitate to email, or call.

Doug Alden

Link to article…

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PS: This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.

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