What Happens to the Markets When the Economy Rolls Over While Prices Rise?

(we’ll soon find out)

The economy (GDP) appears to be rolling over… right as inflation is heating up.

GDP growth for 1Q18 clocked in around 2.3%. Under normal circumstances, this wouldn’t be particularly bad. However, in light of the fact that 4Q17 GDP growth was 2.6%, which itself was down from the growth rate of 3.2% in 3Q17, it quickly becomes evident that the US economy is now softening.

Unfortunately, this is ALSO occurring at a time when inflation is rising sharply. To whit:

  • The NY Fed’s UIG inflation metric shows inflation to be 3.1%
  • The Atlanta Fed’s Sticky Inflation metric shows inflation to be 2.5%
  • Even the “official” inflation metric, the Bureau of Labor Statistic’s CPI metric, shows inflation at 2.5%.

It is easy to shrug off these data points as being short-term spikes, however, we are already beginning to see signs of REAL inflation cropping up in the REAL economy.

As I’ve noted previously, inflation enters the financial system in stages.

The first stage involves a jump in prices paid by producers. This means that those firms responsible for manufacturing goods and services suddenly see a sharp spike in the cost of basic materials they use to build/ manufacture their finished goods.

That process began in early 2016 and accelerated throughout 2017 into this year. Indeed, the Producer Price Index has risen in 8 out of the last 9 months.


A few months here and there is no big deal, but a persistent trend such as this means firms will soon have to raise the prices of the finished goods they are selling or risk seeing their profits drop.

We hit that point in March 2018: according to the National Federation of Independent Business (NFIB), a net percent of 25% of small business owners plan on raising prices, a 10-year high and up from just 2% in 2016.

The NFIB is straightforward in its assessment: “This should raise the overall average increase in average prices for the economy.” In plain terms, higher prices will soon be hitting the economy.

A weakening GDP and higher inflation… there is a word for this, it’s stagflation.

Put simply, STAGflation is on its way. And smart investors are already taking steps to profit from it..

On that note, we just published a Special Investment Report concerning a FIVE secret investments you can use to make inflation pay youas it rips through the financial system in the months ahead

The report is titled Survive the Inflationary Storm

We are making just 100 copies available to the public.

To pick up yours, swing by:


Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

Disclaimer: The information contained on this website is for marketing purposes only. Nothing contained in this website is intended to be, nor shall it be construed as, investment advice by Phoenix Capital Research or any of its affiliates, nor is it to be relied upon in making any investment or other decision. Neither the information nor any opinion expressed on this website constitutes and offer to buy or sell any security or instrument or participate in any particular trading strategy. The information in the newsletter is not a complete description of the securities, markets or developments discussed. Information and opinions regarding individual securities do not mean that a security is recommended or suitable for a particular investor. Prior to making any investment decision, you are advised to consult with your broker, investment advisor or other appropriate tax or financial professional to determine the suitability of any investment. 

Opinions and estimates expressed on this website constitute Phoenix Capital Research's judgment as of the date appearing on the opinion or estimate and are subject to change without notice. This information may not reflect events occurring after the date or time of publication. Phoenix Capital Research is not obligated to continue to offer information or opinions regarding any security, instrument or service. 

Information has been obtained from sources considered reliable, but its accuracy and completeness are not guaranteed. Phoenix Capital Research and its officers, directors, employees, agents and/or affiliates may have executed, or may in the future execute, transactions in any of the securities or derivatives of any securities discussed on this email. 

Past performance is not necessarily a guide to future performance and is no guarantee of future results. Securities products are not FDIC insured, are not guaranteed by any bank and involve investment risk, including possible loss of entire value. Phoenix Capital Research, OmniSans Publishing LLC and Graham Summers shall not be responsible or have any liability for investment decisions based upon, or the results obtained from, the information provided. 

Phoenix Capital Research is not responsible for the content of other websites or emails to which this one may be linked and reserves the right to remove such links. OmniSans Publishing LLC and the Phoenix Capital Research Logo are registered trademarks of Phoenix Capital Research. Phoenix Capital Management, Inc.
What Happens When the Everything Bubble Bursts?
  • By trying to corner the bond market (risk-free rate)
  • the Fed has created a bubble in everything
  • Reserve your copy of our Executive Summary
  • To prepare for what's coming down the pike!
Your contact information will never be rented or sold to anyone EVER.