by Gary Alexander

February 8, 2022

The January Consumer Price Index (CPI) will be released on Thursday morning, February 10, at 8:30 am Eastern time. Be prepared for a shockingly high number. How do we know? The CRB Commodity index was up over 10% in January alone – an annual rate of over 120%. The energy spectrum of prices rose by double digits across the board – as did many components for new cars, like iron ore, or lithium for EV batteries, or the platinum group metals for catalytic converters – and there is still a huge chip shortage.

Used-vehicle prices rose by 37.3% and 48.4% last year, according to two major inflation measures.

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Throughout 2021, Fed Chair Jerome Powell and most other Federal Reserve officials told us that inflation was “transitory.” One Fed official last April cheerfully assured us in a Barron’s interview that we needed to pump inflation higher, but don’t worry – we can easily bring it down again if it goes too high! That prompted me to write a column, titled “Inflation Will Roar Again, and Probably Soon” (April 13, 2021).

Here’s one passage from that column last April:

“Amazingly, official Fed policy is to try to push their favorite inflation metric higher, to 2%. In a Barron’s interview (“A Central Banker on a Mission,” April 12, 2021), San Francisco Fed President Mary Daly, a voting member of the FOMC this year, said ‘We have struggled for a whole decade…to get inflation up to our 2% goal.’ Then she promised, “We always have the tools to pull inflation down if it gets too high.” File that promise away for future review – or review Paul Volcker’s experiences in 1979-82 to see how he struggled to rein-in double-digit inflation: We had to suffer two recessions.”

— Growth Mail, “Inflation Will Roar Again, and Probably Soon” April 13, 2021

Let me remind you – and remind any short-sighted Federal Reserve Governors – how costly it is to rein in “too much money” by hearkening back to two past Februarys, when liquidity had to be vacuumed back.

Example #1: February 1982: After a decade (the 1970s) of too much money creation, inflation hit double digits during a recession, 1979-80, so President Jimmy Carter nominated Paul Volcker as Federal Reserve Chairman, tasking him with conquering inflation, a noble mission which ultimately cost Carter his job.

Mr. Volcker succeeded, at the cost of two deep recessions, 1979-80 + 1981-82, with double-digit interest rates, double-digit unemployment, plus that initial double-digit inflation rate. The Prime Rate hit 20% in 1980, but Volcker cut inflation by 10 points and kept it muted through his entire tenure (he left in 1987).

Volcker died on December 8, 2019, blessedly missing COVID-19 and the return of high inflation. This month, we will likely hit the highest year-over-year rate in the Consumer Price Index in exactly 40 years. The last time the CPI rose by over 7.2% on a year over year basis was February 1982 (vs. February 1981), when it was up 7.6%. (The February CPI will be released next month, on Thursday, March 10, 2022.)

Example #2: February 2000: The 1990s weren’t a bit like the 1970s. There wasn’t a flood of new money printing, but there was asset inflation in a tech bubble. There was also the threat of the “Y2K” bug. The Fed, like almost everyone else, feared that computers would lock up on January 1, 2000, due to a Fortran computer programming bug which would prevent the computer from recognizing the new Millennium’s dates, so the Fed flooded the system with fresh new cash throughout 1999. This money largely went into speculative NASDAQ stocks – just like the 2020-21 pandemic stimulus checks went into tech stocks.

When Y2K came and went with few computer glitches, the Fed had to mop up this extra liquidity. That’s when the Dow fell but NASDAQ kept soaring, with a mind of its own. February 2000 was a strange month. According to “The Almanac Investor,” the Dow Industrials fell -7.4% in February 2000, the S&P 500 fell by over 2%, but NASDAQ soared 19.2% in February 2000 alone. On this date, February 8, 2000, hackers attacked and temporarily shut down several popular Internet business sites, like, eBay and, but NASDAQ ignored even this hackers’ Armageddon and gained 2.44% that day!

Something like that is happening now. All those stimulus-check chickens are coming home to roost.
Navellier & Associates owns (AMZN), in a few accounts in managed accounts but does not own eBay (EBAY). Gary Alexander does not own (AMZN) or eBay (EBAY) personally.

The Public is More Concerned about Inflation than our Politicians, Media or Central Bankers Are

Several polls show that the public is more concerned about inflation than our politicians, press or central bankers are. One of the main reasons is that wages in most areas are not rising enough to match inflation.

The latest Fox News poll shows that 54% of registered voters say they are “extremely worried” about rising prices, far outpacing concerns about Omicron variants, crime or any other issue. As for inflation’s ‘transitory’ nature, voters don’t buy it: 71% believe that high inflation will last at least a full year longer.

The latest NBC survey asked, “Do you think that your family’s income is going up faster than the cost of living, or staying about even with the cost of living, or falling behind the cost of living?” Only 7% said they were getting ahead; 31% said they were breaking even, and 61% said they were falling behind.

Data from the Bureau of Labor Statistics (BLS) supports the 61% showing that workers suffered a 2.4% drop in the purchasing power of their hourly wages in 2021. (On the asset ledger, however, household assets went up, especially for homeowners and stock investors. The median home price gained $83,500 (+30%) from $274,500 at the end of 2019 to $358,000 at the end of 2021, and stocks also soared then.)

Graphs are for illustrative and discussion purposes only. Please read important disclosures at the end of this commentary.

Super Bowl Seats Suffer Hyper-Inflation

One price that is going up without any perceived comparative value is the price of a seat in a Super Bowl football game. Super Bowl I was half full, but the seat only cost $12. In 2012, it was $1,200, up 100-fold:

This year, $6,000 gets you in the nose-bleed section. Here’s a map from Reddit for the cost of seats at next Sunday’s Super Bowl LVI, plus parking – and you also need a VAX card and a face mask there.

This year, $6,000 gets you in the nose-bleed section. Here’s a map from Reddit for the cost of seats at next Sunday’s Super Bowl LVI, plus parking – and you also need a VAX card and a face mask there.

All content above represents the opinion of Gary Alexander of Navellier & Associates, Inc.

Please see important disclosures below.

Also In This Issue

About The Author

Gary Alexander

Gary Alexander has been Senior Writer at Navellier since 2009.  He edits Navellier’s weekly Marketmail and writes a weekly Growth Mail column, in which he uses market history to support the case for growth stocks.  For the previous 20 years before joining Navellier, he was Senior Executive Editor at InvestorPlace Media (formerly Phillips Publishing), where he worked with several leading investment analysts, including Louis Navellier (since 1997), helping launch Louis Navellier’s Blue Chip Growth and Global Growth newsletters.

Prior to that, Gary edited Wealth Magazine and Gold Newsletter and wrote various investment research reports for Jefferson Financial in New Orleans in the 1980s.  He began his financial newsletter career with KCI Communications in 1980, where he served as consulting editor for Personal Finance newsletter while serving as general manager of KCI’s Alexandria House book division.  Before that, he covered the economics beat for news magazines. All content of “Growth Mail” represents the opinion of Gary Alexander

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