Here is a conversation that I have a practically a daily basis:

1. The fed is printing money like it’s going out of style.
2. The dollar is going to get crushed.
3. The result will be third world-like hyper inflation.

While I do believe that we will have higher than baseline inflation at
some point in time, the $64,000 question is, “When?” The gurus at BNY
Mellon (and other really smart people like Jim Rogers and Marc Faber)
think that it may be 2-3 years before inflation rears its ugly head due to
the following:

1. Unemployment is still increasing and will continue to do so. Wages and
benefits account for 2/3 of the rate of inflation.
2. Factory utilization is at an all time low of 65%. By the way, 85% is
considered “full capacity” due to plants being taken off-line for repairs
and maintenance.
3. Both consumers and corporations are still in the de-leveraging, debt
reduction mode, resulting in a low demand for money.

So there is still a great deal of slack in the economy, but preparing for
inflation is like buying life insurance: the best time to do so is when
you don’t need it and can afford it. Just after the first of the year, in
an effort to anticipate future inflation, we added TIPS, commodities, and
increased our weighting of emerging markets in clients’ portfolios,
knowing full well that we are early. Given the uncertain market
environment I continue to believe that getting as much return up front as
possible in the form of dividends and interest makes a lot of sense. In
the meantime, make sure you understand what you own, why you own it, and
how much risk you are really assuming in your portfolio structure.  If you
would like BNY Mellon to give you a second opinion on your portfolio, let
me know.