Stagflation Warning: Why Asset Ownership is Now a Necessity

The article emphasizes that in the current economic landscape, characterized by looming stagflation, owning tangible assets is no longer a preference but a necessity. Stagflation is defined by stagnant growth, declining purchasing power, and central banks cutting rates despite persistent inflation. This unprecedented scenario is evident as the U.S. Fed considers rate cuts into over 2.9% core PCE inflation—a situation not seen in three decades—while the labor market deteriorates with widespread layoffs and fewer job openings. Policymakers are seen as desperate to prevent deeper economic pain, even if it risks fueling inflation.

The primary benefit of asset ownership is safeguarding against the “silent inflation thief” that continuously erodes the value of cash. With the U.S. federal deficit exceeding $2 trillion annually, future tax increases, increased borrowing, and potential currency devaluation are significant threats to those holding fiat currency. Assets such as productive businesses, commodities, or uncorrelated digital stores of value like Bitcoin, provide a crucial hedge against this erosion. Value investor Mike Alfred notes that wealth is primarily built through entrepreneurship and investing, not salaries, reinforcing the importance of asset accumulation.

Conversely, the risks of not owning assets are substantial, including being “left behind” as economic conditions worsen. Suspended jobs reports due to government shutdowns further amplify market uncertainty and risk, making hard, productive, or scarce assets like Bitcoin essential for weathering volatility. The article predicts two more Fed rate cuts in 2025, which, amidst stagflation, would further depress real rates below inflation, making “safe” government bonds unattractive and penalizing savers. The message from The Kobeissi Letter is unequivocal: “own assets or be left behind,” positioning asset ownership as a vital lifeline in this era of converging government support, inflation, and technological revolutions.

(Source: https://cryptoslate.com/as-stagflation-looms-experts-advise-own-assets-or-risk-being-left-behind/)