High gas prices are something we all hate because it’s almost impossible to avoid them.

Worse yet, they affect the price of everything, from the groceries our families eat to the toys we give our children for Christmas.

There’s a reason they call a measure for these costs the “misery index.” It was invented in the 1970s, when the Great Inflation era was raging for more than a decade.

The way out of that decade of pain was the Fed tightening monetary policy and propagating a series of recessions.

Right now, higher gas prices are just one way we feel the immediate effects of rising inflation. But there’s another long-term factor at play that could lead to more misery ahead… and for a long time. Thanks to this $20 trillion dollar “secret” plan our government is pursuing… History is about to repeat itself – and fast.

At Intelligent Income Daily, our mission is to guide you toward reliable, income-producing ideas that can protect your hard-earned savings in all economic, market, and inflationary environments.

Today, I’ll explain how the government’s $20 trillion secret could lead to high inflation for the next decade… why the Fed has to take tough – but necessary – action… and share a blue-chip pick that can shield you from the damage.

The Government’s Dirty $20 Trillion Inflation Secret

A secret not many people know is the fact that the Congressional Budget Office (CBO) expects the U.S. government’s deficit over the next decade to reach $20 trillion.

Now I say “secret,” but this has been a well-known skeleton in the closet since 2021… A lot of people (who should know better) as well as institutions have just been trying not to look. 

In June 2021, inflation hit 5% for the first time and kept climbing to 6% by year end. The Fed also started talking about interest rate hikes that same month.

But no one wanted to think about that after a global pandemic. Everyone wanted to get back to normal.

Here’s why this is bad news for your family and your portfolio…

In addition to adding $20 trillion in debt, we now risk runaway inflation.

That’s because whenever the government borrows to spend (or prints money like it did during the pandemic), it helps push inflation higher.

While the Fed is hiking rates to kill inflation, the recent banking crisis is also threatening a recession in just a few months. (Next week, I’ll even show you why the banking crisis might be making the risk of stagflation worse, not better.)

But right now, let me show you what this $20 trillion deficit means for us.

High Inflation Will Bankrupt the Government if It Continues

(Source: CBO)

Today, the U.S. inflation rate is at 6.04%. We currently exist at the bottom of this chart.

If this remains the long-term inflation rate, by 2033 almost 50% of the taxes we pay annually will just go toward the interest rate of our national debt…

To put it even more simply, our taxes will increase, and almost 50% or more will just be wasted trying to keep us from defaulting on our debt as a country.

And if inflation stays this high, then the government’s borrowing costs will soar to around $3 trillion within a decade, about 500% more than 2021.

That’s about 8% of the economy going to service the national debt. And it would only get worse.

According to the CBO, in 2053, the U.S. annual deficit would be about $20 trillion, or 25% of GDP.

The U.S. public debt would be $290 trillion, and our annual interest costs would be $16 trillion or 20% of GDP.

An 8% GDP deficit, like what we’re facing by 2033, according to the government’s own forecasts, is consistent with 5% inflation. By 2053, if nothing is done, then deficits of 25% of GDP could stoke 15% inflation.

These aren’t wild estimations. We can see in the past few years, the debt and Fed funded pandemic stimulus equaled 15% of GDP, and inflation soared to 9%. If 25% deficits were to happen, they’d be consistent with 15% inflation… just like what we saw in 1980 amid the Great Inflation.

Back then, the Fed had to jack interest rates to 20%, cause two severe recessions, and send unemployment to 9%.

It’s a doomsday scenario.

But the good news is the Fed knows this now. And that’s why it plans to hike rates as high as 6% to 7% to beat inflation.

Factor in $1.1 trillion in reverse money printing, and that’s the equivalent of the Fed hiking as high as 11% by my calculations.

But if that’s what it takes to stop inflation from raging out of control and bankrupting the government, it will be necessary.

Another era of economic pain looks imminent… But the investments that endured times like these before can protect and grow your long-term income in the coming years starting now – whether or not the Fed succeeds in beating inflation by inducing a recession.

A Pick to Protect Your Wealth

While inflation is raging, high-yielding real assets like Enterprise Products Partners (EPD) are a great way to protect yourself. Hard assets, especially, are some of the best investments you can make.

This pipeline giant has the best management team in the industry. That’s allowed it to raise its dividend for 24 consecutive years.

Its balance sheet is so strong that S&P just raised Enterprise’s credit rating to A-, making it the first A- rated pipeline company in history.

Enterprise yields a safe 8%. It’s growing at 4% to 5%, meaning it’s expected to deliver about 25% better returns than the S&P, just as it’s done for the past 24 years.

And what if the Fed loses its fight and we stay stuck in a high-inflation scenario?

The last time that happened, from 2000 to 2013, Enterprise went up 700%. And that’s why we’re comfortable it could do it again if history repeats itself.

For more of these incredible picks, check out our Fortress Portfolio service. It has 17 world-class high-yield inflation beaters, including one stock that soared 15% last year when the market fell almost 20%. If you’d like to learn more about these picks and the strategies we share at Fortress Portfolio, click here.

Meanwhile, don’t wait to start hedging your portfolio against the pain that’s sure to come. It might not be fun to look at the skeleton in our nation’s closet, but you will be grateful that you did and prepared for its walk into the light.

Safe Investing,

Adam Galas
Analyst, Intelligent Income Daily

P.S. The number of economic factors to keep track of to predict the next big crash are too many to keep count of. Luckily, you don’t have to.

I’m plugged into all the data, so you don’t have to be. And I’ll break down what they mean for your finances in easy-to-follow videos.

So click the image below to listen to my explanation of what’s actually going on with the economy and the markets, and why the doomsday prophets are wrong again.


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