On Friday I outlined a very disturbing reality.

That reality?

That the Fed is very likely now a political entity.

By quick way of review:

• Fed Chair Jerome Powell’s term as Fed Chair ends this year. 
• The Biden administration has leaked in the media that it is considering giving Powell a second term.
• Powell failed to present any meaningful information concerning the tightening of monetary policy at the Fed’s annual Jackson Hole meeting.
• Based on inflation, GDP, and unemployment numbers, there are ZERO economic reasons for the Fed to NOT be already tightening monetary policy aggressively.
• The above items suggest strongly that Powell has cut a deal with the Biden administration to gain reappointment.

That deal?

Keep the easy money flowing. 

Again, there are no economic reasons for the Fed to continue its current monetary path. The fact that Jerome Powell won’t even commit to presenting a clear timeline for when the Fed will taper is truly negligent.

So where does this leave us?

As I’ve outlined recently, there are clear signs that inflation has entered the financial system.

Commodities, which are inflationary hedges, have just broken out of a 13-year BEAR market. 

Most important in this sector are agricultural commodities. The Fed’s own research has shown that the single best predictor of future inflation is food inflation. Well, take a look at what agricultural commodities are doing.

And then there’s gold, which recently rose to new all-time highs in every major currency.

These charts are SCREAMING inflation. And with the Fed refusing to tighten monetary policy for political reasons, this is likely just the beginning.

Smart investors are taking steps to profit from inflation today. I’ll outline some of my favorite ideas tomorrow.