WINDERMERE, Fla. (Stockpickr) -- I don't know what camp you're in, but I am strongly in the camp that has accepted the fact that inflation is going to be a gigantic trend for the foreseeable future. And when I say "gigantic trend," I mean that it's going to make savvy market players tons of profits if they position themselves in just the right stocks.
So many things right now are pointing toward a coming inflation tsunami that it's almost too much to list. I will mention just a few that deserve your attention: soaring prices in precious metals such as gold and silver, soaring crude oil prices, soaring food prices and soaring soft commodity prices such as cotton. This market behavior just can't be ignored. Traders and investors should perk up right now and pay attention because it's not just the speculators who are pushing up prices. Costs for all of things consumers need on a daily basis are going through the roof due to the unintended consequences of a loose monetary policy that has been on full display throughout the world.
Central banks across the globe are now scrambling to start raising interest rates in an effort to fight off rising inflation. South Korea's central bank just raised interest rates on Thursday. A Chinese central bank advisor recently said that inflation could hit 5% due to soaring commodity prices and rising wages. The European Central Bank said on Thursday that "strong vigilance is warranted" -- code for raising rates -- to contain inflation risks. The Polish central bank said today that it will probably raise the benchmark interest rate to a two-year high of 4.25% by the end of June to keep inflation in check.
Related: 3 Market Leaders Headed Even HigherIf all of that isn't enough to convince you, then I suggest you consider the biggest tell of all that out-of-control inflation is speeding toward us like a Bugatti Veyron: the news that broke Thursday that the world's largest bond fund has dumped all of its U.S. debt. Bill Gross, who runs Pacific Investment Management, said he eliminated all government-related debt from his flagship fund last month. Pimco's $237 billion Total Return Fund (PTTRX) last held zero government-related debt in January of 2009. Even more interesting were Gross' comments on inflation, which he said may be a bigger factor than many are suggesting. Under normal market conditions, bonds are usually safer than stocks, but they get absolutely killed when inflation rears its ugly head. With this in mind, let's take a look at stocks that should benefit tremendously from rising inflation.
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