by Gary Alexander

June 22, 2022

Last Tuesday, Louis Navellier and I hosted a Teleforum for almost 400 private clients and subscribers to MarketMail. Louis answered over a dozen questions live and gave his views on four major concerns, but our first order of business was to poll our callers on which of four subjects concerned them the most.

Take the same poll now. Which of these subjects concerns you most for the rest of 2022? (Pick only one.)

  1. Inflation
  2. Interest rates
  3. COVID-19
  4. International conflicts

The answers were NOT evenly divided. Of 225 respondents, over 61% chose inflation, 21% chose international conflicts, 17% chose interest rates, and only one person (that’s 0.4%) chose COVID-19.

Before the poll, Louis and I had predicted something along those lines, since COVID fears were waning, and interest rates mostly impact those in the mortgage market or deep into bonds. Even then, interest rates follow inflation – so if you kill inflation, interest rates will likely decline too. Wars drain a nation’s blood and treasure, but the current wars are very far away, whereas inflation impacts everyone, every day.

In essence, these main concerns also replicate the 1970s – a time of rising inflation, rising interest rates (to fight that inflation), and rising Cold War tensions, with an expansionist Soviet Union (under Leonid Brezhnev) which occupied nations on most continents and invaded Afghanistan the last week of 1979.

Agricultural Commodities Index Chart

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

Inflation suddenly burst on the scene in 2021 under Biden’s Presidency. He isn’t entirely to blame, but neither is he as innocent as he claims. At several times on the campaign trail, candidate Biden said, “I guarantee you we will end fossil fuels” and “No more drilling, including offshore. No ability for the oil industry to continue to drill. Period.” That extreme policy was guaranteed to exacerbate energy inflation.

In addition, President Biden passed an inflationary $1.9 trillion spending bill in his first few months in office, a bill which even leading Democratic economist Larry Summers warned would be inflationary.

In early 2021, Fed officials all sang from the same hymnal, saying that inflation would be “transitory” and some inflation would be good after years of low inflation. In an August 2020 statement on their long-term goals and strategy, the Fed said it would welcome inflation above 2% “for some time” to compensate for prior inflation shortfalls of its 2% goal. They also said they could easily control inflation if it got too high.

San Francisco Federal Reserve President Mary Daly, a voting member of the FOMC in 2021, said in a Barron’s interview (April 12, 2021) that, “We have struggled for a whole decade… to get inflation up to our 2% goal.” She deflected inflation fears by saying, “We always have the tools to pull inflation down if it gets too high.” That hubris got my goat, so I wrote a Growth Mail column rebutting her confidence: “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 that felt like a Depression.”

That quote was in the first of several articles in which I warned of rising inflation and lower GDP growth:

4-13-21: Inflation Will Roar Again – And Probably Soon – Navellier (Growth Mail link)
6-8-21: Enjoy Your GDP “Sugar High” – While it Lasts! – Navellier (Growth Mail link)
6-22-21: The Grand Experiment in “Funny Money” Continues – Navellier (Growth Mail link)

Maybe it’s my background in monetary economics and gold investing, but I have been writing about Fed malpractice and fiscal follies since graduating from college 55 years ago this month, so it really wasn’t that hard to make these predictions. What’s baffling to me is why these PhD Fed economists don’t get it.

Now, let’s look at the current situation, with a special focus on energy, sanctions, Russia, and the ruble.

Sanctions Hurt the Wrong People, Including Us

Sanctions don’t tend to hurt those in power in the offending nation. They tend to hurt the poorer citizens of that nation and the citizens of the victim nations, especially European citizens in this Ukrainian war.

On June 14, Bloomberg reported that, “Biden officials privately express concern that rather than dissuade the Kremlin as intended, U.S. sanctions have instead exacerbated inflation, worsened food insecurity and punished ordinary Russians more than Putin or his allies.” Prices in Europe are up spectacularly, mostly due to the sanctions, but also due to the fall of the euro and the spectacular recovery and rise of the ruble.

On March 26, 2022, about a month into the Russian/Ukrainian war, President Biden tweeted: “As a result of our unprecedented sanctions, the ruble was almost immediately reduced to rubble.”

Some rubble! From March 4 to June 20, 2022, the euro is down 62% to the ruble – falling from 147 ruble per euro on March 4 to 55.7 rubles per euro on June 20. (Inversely, the ruble is up over 160% from its lows, from .0068 euro on March 4 to .0180 euro on June 20.) That makes energy far more expensive in Europe, not only due to the shortages from the sanctions but also from the weaker euro to the ruble.

Ruble versus Euro Chart and Ruble Gold Standard Bar Chart

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

One big reason for the ruble’s revival is that Russia just pegged the ruble to gold, at a rate of 5,000 ruble per gram, giving Russia the only limited gold standard on earth. The reason Russia could do this is that they have been exchanging paper money for gold for 20 years, buying more gold than any central bank.

Russian Gold Reserves Bar Chart

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

Political Double Talk Is Wearing Thin as Elections Approach

Meanwhile, leading Democrats are pushing all the usual political buttons of blaming “corporate greed” instead of looking in the mirror at their own policies. President Biden sent a letter to oil executives June 10, warning them that any “above normal profits” are not acceptable. In that letter, he used variations of the phrase, “Vladimir Putin’s Price Hike” five times as he issued challenges to oil companies to lower their profits and produce more of their products to counter the inflation “that Vladimir Putin’s actions have created for American families.” The President singled out Big Oil for their greedy reluctance to sell more oil (!), even though Biden’s policy was to phase out fossil fuels in favor of other sources of energy.

The President must not realize that energy is already a very volatile and risky business enterprise, with companies failing right and left, even in the best of bullish times. Alex Muresianu of the Tax Foundation wrote that, “Energy was the most volatile sector of the stock market in the 2010s. And when the pandemic arrived, more than 100 oil companies went bankrupt, and the major producers significantly rolled back their operations.” Considering Biden’s anti-fossil fuel promises and the Green New Deal, Chevron CEO Mike Wirth, said “I personally don’t believe there will be a new petroleum refinery ever built in this country again … What we’ve seen over the last two years are shutdowns. We’ve seen refineries closed.”

Secretary of Energy Jennifer Granholm is an ideologue who believes that “Ultimately, the solution to make the entire world energy secure is to move to clean energy. No country has ever been held hostage to access to the sun or access to the wind.” Oh, really? The sun always shines, does it? Clouds and snow and rain never darken our skies? The wind always blows hard enough to drive large generators? Think again.

The art of politics is compromise. The President’s progressive wing better learn that art before November, or else inflation will keep rising and their political dominance in Washington DC will start to unravel.

Navellier & Associates owns Chevron Corp. (CVX) in managed accounts. Gary Alexander does not own Chevron Corp. (CVX) personally.

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

Please see important disclosures below.

Also In This Issue

Global Mail by Ivan Martchev
Fortune Does Not Favor the Bitcoin Brave

Sector Spotlight by Jason Bodner
What Capitulation Looks Like

View Full Archive
Read Past Issues Here

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

Important Disclosures:

Although information in these reports has been obtained from and is based upon sources that Navellier believes to be reliable, Navellier does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute Navellier’s judgment as of the date the report was created and are subject to change without notice. These reports are for informational purposes only and are not a solicitation for the purchase or sale of a security. Any decision to purchase securities mentioned in these reports must take into account existing public information on such securities or any registered prospectus.To the extent permitted by law, neither Navellier & Associates, Inc., nor any of its affiliates, agents, or service providers assumes any liability or responsibility nor owes any duty of care for any consequences of any person acting or refraining to act in reliance on the information contained in this communication or for any decision based on it.

Past performance is no indication of future results. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. It should not be assumed that any securities recommendations made by Navellier. in the future will be profitable or equal the performance of securities made in this report. Dividend payments are not guaranteed. The amount of a dividend payment, if any, can vary over time and issuers may reduce dividends paid on securities in the event of a recession or adverse event affecting a specific industry or issuer.

None of the stock information, data, and company information presented herein constitutes a recommendation by Navellier or a solicitation to buy or sell any securities. Any specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients. The holdings identified do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.

Information presented is general information that does not take into account your individual circumstances, financial situation, or needs, nor does it present a personalized recommendation to you. Individual stocks presented may not be suitable for every investor. Investment in securities involves significant risk and has the potential for partial or complete loss of funds invested. Investment in fixed income securities has the potential for the investment return and principal value of an investment to fluctuate so that an investor’s holdings, when redeemed, may be worth less than their original cost.

One cannot invest directly in an index. Index is unmanaged and index performance does not reflect deduction of fees, expenses, or taxes. Presentation of Index data does not reflect a belief by Navellier that any stock index constitutes an investment alternative to any Navellier equity strategy or is necessarily comparable to such strategies. Among the most important differences between the Indices and Navellier strategies are that the Navellier equity strategies may (1) incur material management fees, (2) concentrate its investments in relatively few stocks, industries, or sectors, (3) have significantly greater trading activity and related costs, and (4) be significantly more or less volatile than the Indices.

ETF Risk: We may invest in exchange traded funds (“ETFs”) and some of our investment strategies are generally fully invested in ETFs. Like traditional mutual funds, ETFs charge asset-based fees, but they generally do not charge initial sales charges or redemption fees and investors typically pay only customary brokerage fees to buy and sell ETF shares. The fees and costs charged by ETFs held in client accounts will not be deducted from the compensation the client pays Navellier. ETF prices can fluctuate up or down, and a client account could lose money investing in an ETF if the prices of the securities owned by the ETF go down. ETFs are subject to additional risks:

  • ETF shares may trade above or below their net asset value;
  • An active trading market for an ETF’s shares may not develop or be maintained;
  • The value of an ETF may be more volatile than the underlying portfolio of securities the ETF is designed to track;
  • The cost of owning shares of the ETF may exceed those a client would incur by directly investing in the underlying securities; and
  • Trading of an ETF’s shares may be halted if the listing exchange’s officials deem it appropriate, the shares are delisted from the exchange, or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.

Grader Disclosures: Investment in equity strategies involves substantial risk and has the potential for partial or complete loss of funds invested. The sample portfolio and any accompanying charts are for informational purposes only and are not to be construed as a solicitation to buy or sell any financial instrument and should not be relied upon as the sole factor in an investment making decision. As a matter of normal and important disclosures to you, as a potential investor, please consider the following: The performance presented is not based on any actual securities trading, portfolio, or accounts, and the reported performance of the A, B, C, D, and F portfolios (collectively the “model portfolios”) should be considered mere “paper” or pro forma performance results based on Navellier’s research.

Investors evaluating any of Navellier & Associates, Inc.’s, (or its affiliates’) Investment Products must not use any information presented here, including the performance figures of the model portfolios, in their evaluation of any Navellier Investment Products. Navellier Investment Products include the firm’s mutual funds and managed accounts. The model portfolios, charts, and other information presented do not represent actual funded trades and are not actual funded portfolios. There are material differences between Navellier Investment Products’ portfolios and the model portfolios, research, and performance figures presented here. The model portfolios and the research results (1) may contain stocks or ETFs that are illiquid and difficult to trade; (2) may contain stock or ETF holdings materially different from actual funded Navellier Investment Product portfolios; (3) include the reinvestment of all dividends and other earnings, estimated trading costs, commissions, or management fees; and, (4) may not reflect prices obtained in an actual funded Navellier Investment Product portfolio. For these and other reasons, the reported performances of model portfolios do not reflect the performance results of Navellier’s actually funded and traded Investment Products. In most cases, Navellier’s Investment Products have materially lower performance results than the performances of the model portfolios presented.

This report contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The U.S. Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms. Our forward-looking statements are based on a series of expectations, assumptions, and projections, are not guarantees of future results or performance, and involve substantial risks and uncertainty as described in Form ADV Part 2A of our filing with the Securities and Exchange Commission (SEC), which is available at or by requesting a copy by emailing All of our forward-looking statements are as of the date of this report only. We can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially. You are urged to carefully consider all such factors.

FEDERAL TAX ADVICE DISCLAIMER: As required by U.S. Treasury Regulations, you are informed that, to the extent this presentation includes any federal tax advice, the presentation is not written by Navellier to be used, and cannot be used, for the purpose of avoiding federal tax penalties. Navellier does not advise on any income tax requirements or issues. Use of any information presented by Navellier is for general information only and does not represent tax advice either express or implied. You are encouraged to seek professional tax advice for income tax questions and assistance.

IMPORTANT NEWSLETTER DISCLOSURE:The hypothetical performance results for investment newsletters that are authored or edited by Louis Navellier, including Louis Navellier’s Growth Investor, Louis Navellier’s Breakthrough Stocks, Louis Navellier’s Accelerated Profits, and Louis Navellier’s Platinum Club, are not based on any actual securities trading, portfolio, or accounts, and the newsletters’ reported hypothetical performances should be considered mere “paper” or proforma hypothetical performance results and are not actual performance of real world trades.  Navellier & Associates, Inc. does not have any relation to or affiliation with the owner of these newsletters. There are material differences between Navellier Investment Products’ portfolios and the InvestorPlace Media, LLC newsletter portfolios authored by Louis Navellier. The InvestorPlace Media, LLC newsletters contain hypothetical performance that do not include transaction costs, advisory fees, or other fees a client might incur if actual investments and trades were being made by an investor. As a result, newsletter performance should not be used to evaluate Navellier Investment services which are separate and different from the newsletters. The owner of the newsletters is InvestorPlace Media, LLC and any questions concerning the newsletters, including any newsletter advertising or hypothetical Newsletter performance claims, (which are calculated solely by Investor Place Media and not Navellier) should be referred to InvestorPlace Media, LLC at (800) 718-8289.

Please note that Navellier & Associates and the Navellier Private Client Group are managed completely independent of the newsletters owned and published by InvestorPlace Media, LLC and written and edited by Louis Navellier, and investment performance of the newsletters should in no way be considered indicative of potential future investment performance for any Navellier & Associates separately managed account portfolio. Potential investors should consult with their financial advisor before investing in any Navellier Investment Product.

Navellier claims compliance with Global Investment Performance Standards (GIPS). To receive a complete list and descriptions of Navellier’s composites and/or a presentation that adheres to the GIPS standards, please contact Navellier or click here. It should not be assumed that any securities recommendations made by Navellier & Associates, Inc. in the future will be profitable or equal the performance of securities made in this report.

FactSet Disclosure: Navellier does not independently calculate the statistical information included in the attached report. The calculation and the information are provided by FactSet, a company not related to Navellier. Although information contained in the report has been obtained from FactSet and is based on sources Navellier believes to be reliable, Navellier does not guarantee its accuracy, and it may be incomplete or condensed. The report and the related FactSet sourced information are provided on an “as is” basis. The user assumes the entire risk of any use made of this information. Investors should consider the report as only a single factor in making their investment decision. The report is for informational purposes only and is not intended as an offer or solicitation for the purchase or sale of a security. FactSet sourced information is the exclusive property of FactSet. Without prior written permission of FactSet, this information may not be reproduced, disseminated or used to create any financial products. All indices are unmanaged and performance of the indices include reinvestment of dividends and interest income, unless otherwise noted, are not illustrative of any particular investment and an investment cannot be made in any index. Past performance is no guarantee of future results.