28/05/2026
When the Music Stops: What Upcoming Inflation Means for Your Money
It was spring 2021. Lil Nas X and Doja Cat ruled the charts, and inflation, we were assured, was "transitory." It wasn't.
Over the following year, US inflation went on a tear and peaked at 9.1% in June 2022 - the highest reading in 4 decades. The cause, in our view, was clear: coordinated central bank printing vs. a supply-constrained world.
Fast-forward to spring 2026. After years of rate hikes, central banks had wrestled inflation roughly under control. Roughly - because the debt accumulated during that period didn't vanish. It just stopped making headlines.
In 2022, central banks still had room to maneuver. Rate hikes could stifle demand without tipping the world into recession. Equity markets traded sideways in 2022 and 2023, then recovered. By January 2026, the broad consensus was clear: low rates, good times.
Then came the unexpected US and Israeli strike on Iran. Everything changed.
Inflation is climbing again, but the engine is different. This is not demand-led inflation; it is an oil shock.
Markets can absorb higher oil prices. What they cannot absorb is the second-order consequence: disrupted fertiliser production and missed planting seasons across multiple breadbaskets.
Over the next 6–9 months, we will, quite literally, reap what we sow.
Here's the uncomfortable part. Central banks cannot meaningfully raise rates this time. Why? Because US debt-to-GDP has now surpassed the post-WWII record of 106% for the second time in 5 years.
Every additional percentage point translates into hundreds of billions in extra debt-servicing costs. When you carry that much debt, only three doors remain open:
1. Raise taxes
2. Cut public spending
3. Let inflation run hot - and blame "the other"
History suggests door number three is most likely. Inflation is, after all, a tax that arrives without a vote.
Allowing inflation to overrun is, in effect, a stealth devaluation of sovereign debt. The cost is paid by the everyday saver, not the Treasury.
But here is the part most commentary misses. Chaos is not the end of the story.
Every dislocation of this scale has reshaped wealth - not destroyed it. Several sectors are still in the embryonic stages of breaking out to what we believe will be multi-year highs. Layer that over the structural shift to an AI-led economy, and "multi-generational opportunity" is not an overstatement.
What to buy, how much, for how long, depends entirely on your circumstances.
But one rule has held in every cycle since money was invented: the smart money moves to where the best returns are. Quietly, early, and well before the headlines catch up.
Inflation may have been touted as "transitory" in 2021. It is anything but in 2026 — and this time, the central banks have used up their fire extinguishers.
The good news? You have a choice: stand around debating whose fault the fire was, or quietly walk over to where the next building is being built.
