November 13th, 2021

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Dear Retail Investor,

We said it before, and we’ll say it again – this “inflationary period” is not temporary.

This week, it was reported that the cost of living in the US is rising at its fastest annual pace since 1990. The U.S. Bureau of Labour Statistics reported that the all-items consumer price index rose by 6.2% in the 12 months up to October, with almost every single sub-index tracking higher. Some of the biggest jumps were seen in the prices of energy, food, and shelter – you know, the stuff we generally need to get by.

Typically, policy-makers like to strip out the impact of food and energy costs from the overall inflation rate due to their volatile nature, but even by that measure the U.S. inflation rate hasn’t been this high in 30 years.

And when you strip out deflationary tech products from the index, price increases are even more substantial. The price of gas is up 50% over the last year, and the cost of fuel oil to heat homes has risen nearly 60%. If you hadn’t already noticed while grocery shopping, the price of beef is up 25%.

It’s not surprising that inflation is soaring when you take into account the rampant money printing and spending the government’s been doing since the start of Covid. A few weeks ago Congress passed a $1.2 trillion bipartisan infrastructure bill meant to improve America’s transportation, broadband, and utilities.

Now, the Biden administration is trying to push through another $1.75 trillion “social safety net and climate” bill as part of their “Build Back Better” plan. Part of the promotional language around the bill touts proposed tax deductions for Americans.

But a new analysis by the nonpartisan Tax Policy Center found that an element of the proposed bill, increasing the deduction limit on state and local taxes (SALT), could significantly benefit wealthy families living in high-tax states (such as California and New York), while middle-income households would see their taxes reduced by an average of just $20. Hey, that’s almost enough to buy yourself part of a piece of steak…

A separate analysis by the nonpartisan Committee for a Responsible Budget also found that the proposed higher SALT cap would mean that households earning $1 million or more could get a break on their taxes that is 10X that of households earning $50,000 – $100,000. 

Frankly we find the monetary policies coming from the Biden Administration so questionable it’s almost comical, except for the fact that it’s actually quite worrying.

– Dear Retail Investors Editorial Team

In This Issue:

Interview: Watch or listen to our interview with just-listed medical devices company Mainz Biomed (NASDAQ: MYNZ) CEO Guido Baechler.
Spotlight: The hidden indicator warning that we’re in a housing bubble.
Analysis: Exploration-stage miners are high-risk, high reward opportunities. Here’s how to effectively evaluate them.
Interview: Watch or listen to our latest interview with Elemental Royalties (TSXV: ELE; OTCQX: ELEMF) CEO Frederick Bell.


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The hidden indicator warning that we’re in a housing bubble

Like the legendary Yogi Berra once said, it’s déjà vu all over again.

Flash back to 2005.

I was leaving the house of a friend I was staying with in the tony town of Healdsburg, California.

As I walked out the door, two young women dressed to the nines approached me.

“That’s a nice house,” one said.

Before I had a chance to say it wasn’t mine, the other chimed in with, “If you’re ever looking to sell, let us know – we have a lot of buyers waiting for homes like this.”

Then she handed me her card.

It was, of course, a card for a real estate company.

And these women were canvassing the neighborhood hoping to procure some listings for it.

During this period, housing prices in the U.S. were exploding.


Evaluating Exploration-Stage Miners: a Cautionary Tale for Retail Investors

The tale of Noront Resources Inc. (Noront) (TSXV: NOT)  is an important lesson for investing in mining.  Currently, Noront is the midst of a hostile takeover bid. In May, Wyloo Metals Pty Ltd. (Wyloo) (ASX: WYL), an insider to Noront, offered to purchase all the shares from shareholders at C$0.325 a share. A couple of months later, mining behemoth BHP Billton (NYSE: BHP) offered C$0.55 a share. Wyloo countered with a C$0.70 offer, and BHP subsequently upped the bid to C$0.75 and this is where the battle stands. Most recently, however, it appears that Wyloo and BHP are in negotiations to settle the bidding war.



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