(Kitco News) - The price of a loaf of bread could reach $10 this year as inflation rises, said Todd 'Bubba' Horwitz, Chief Market Strategist at BubbaTrading.com, who has worked as a professional trader since 1980.
"At the end of the day, eggs are $8 a dozen, and a loaf of bread is $5 or $6," he observed. "I would not be surprised if, at some point this year, we'll see a $10 loaf of bread."
Speaking to David Lin, Anchor and Producer at Kitco News, Horwitz said that the real inflation rate is higher than that reported by the Bureau of Labor of Statistics, the agency which collects and reports Consumer Price Index (CPI) data. Headline CPI inflation for December was 6.5 percent, a reading that Horwitz called "garbage."
"6.5 percent is a ridiculous number, because we're still well over 20 percent in true, real inflation," he claimed. "Unfortunately, the numbers are quoted without accounting for a big percentage of food and energy. I'm telling you this, the average family spends more on food and energy than they [The Bureau of Labor Statistics] accounts for."
The Bureau of Labor Statistics assumes that a typical household assigns a weight of 14 percent of the CPI basket to food, and 7.5 percent to energy.
Inflation reached a peak of 9.1 percent in June of 2022, before cooling to 6.5 percent in December, which Horwitz attributed to lower gas prices.
"The only thing that has come down recently is the price of oil," he claimed. "However, the price of oil is still 50 percent higher than when President Biden took office… to bring it [inflation] down, you need to go back to producing your own oil. The big hinge pin is the cost of oil."
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Personal Finance in a Recession
As the U.S. economy is set to go into a recession in 2023, Horwitz recommended that Americans be more frugal, and build an "emergency fund."
"You have to start to save money," he suggested. "This does not look or appear like it's going to end anytime soon."
He especially advised people to stay away from credit card debt, which involves "usury rates" of interest.
"You cannot allow yourself to get into credit card debt because the rates that credit card companies charge are called usury rates," he explained. "They [credit card rates] are basically against the law except that the credit card lobby is so strong, that they got around those."
He added, "before investing, pay the credit card debt, because you're not going to make 22 percent or 25 percent on your investment, but you are paying 25 percent on that credit card."
To find out which stocks and commodities Horwitz is investing in to protect his wealth during a recession, watch the video above
Follow David Lin on Twitter: @davidlin_TV
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