Your Macroeconomic Edge

Chapter 8

Hedging Against Stagflation With Commodities, MLPs, REITs, and Preferred and High-Yield Stocks

Earlier chapters have argued that on America’s present fiscal path—which has largely been set by decades of unaffordable commitments by politicians—and the world’s demographic path—which is largely determined by the emancipation of women and rising incomes in more and more of the world—the U.S. economy is destined for stagnation, and the dollar’s purchasing power will ebb away. This combination of anemic growth and inflation was termed “stagflation” in the 1970s, the last time we experienced anything like it.

Baby Boomers whose formative investing years came during the Great Moderation from 1983 through 2007, when both inflation and unemployment ...