Woodstock Financial Advisor – Third Act Retirement Planning —

US Has Record Setting Inflation to start 2022

The US inflation rate has finally breached the 7% mark in December of 2021, setting a new  high since June of 1982. With inflation records being broken and more major economies being affected, what should you know about this sudden surge in the cost of living? Read on to learn more about the impact inflation has on your money and life and the stock market. We also provide a link, to another article, at the bottom of this one that will what can be done to protect yourself against its effects.

Here is an interview of Tommy Cloud about inflation and part of its impact on American finances. 

But before you read the interview, here is a link to our free retirement video that will show you how to avoid running out of money in retirement and potentially increase your retirement income:


Brett (00:03):

Well, good afternoon. Today we have with us Tommy Cloud, who founded Third Act Retirement Planning in 2000 and currently serves as its president. He’s a certified financial planner, chartered financial consultant, and graduate of the great Georgia Tech. At his fee-only, fiduciary firm, he works mainly with CRNAs, successful technology executives and Christians who are at or near retirement with at least $500,000 of investable assets.

Tommy Cloud (00:31):

Or more.

Brett (00:32):

Assets. Tommy Cloud, welcome to the show.

COVID and Vaccines

Tommy Cloud (00:34): 

Thank you, sir. I feel good. I just needed to correct that, Brett: it’s a half million or more. So, I’m feeling okay today. I got my second round of COVID. Did you get hit with the second round? I know you got the first one before I did.

Brett (00:54):

I did not.

Tommy Cloud (00:55):

Well, you haven’t yet, I guess.

Brett (00:58):

I’m sure it’ll come around like everybody else.

Tommy Cloud (01:01):

But you got the vaccines, didn’t you?

Brett (01:03):

[inaudible 00:01:03]

Tommy Cloud (01:04):

You had to.

Brett (01:07):

Yes, due to work. They mandated the shot for anybody who wants to come into the office, and it’s hard to do the job without doing that, leading a team. So I went and got it. Wasn’t that happy about it, but got it. It was the sickest I’ve been in 15 years. It was nasty, which I had told you about. Not a fun experience.

Tommy Cloud (01:24):

Well, I have another client in southern Georgia who’s preparing to be released from a government job because of this vaccine. One of my clients was already released, but he’d saved up money and everything. The lack of income won’t hurt him that much because they’re in great shape. So yeah, I’m doing well though—enjoying the start of the new year and looking forward to chatting about inflation here with you. I’ll tell you what, it’s a hot, hot topic that is moving and grooving.


Brett (01:54): 

Yes. Looking at an article in front of me about inflation, I see it surged 7% in December, the highest rate in 40 years. What do you think about that, Tommy Cloud?

Tommy Cloud (02:05):

Well, it’s something you and I really haven’t experienced a lot of. Others who have are at least generation behind us, and that was that deflationary tsunami that came through in…when was that? In ’08. It just came flat-out through. And now we’re starting to see inflation like we’ve never seen before caused by this COVID thing. I think we’re at 13 trillion in total spending, if I’m not mistaken.

Brett (02:45):

Well, the spending in response to…

Tommy Cloud (02:49):

Yes, the quantitative easing, but we’re talking about what I believe is 13 trillion. I’ve got an article here by NASDAQ that I’d like to share quickly. There it is right here. As we look at the money printing with COVID, it was 13 trillion at the time of this article, which was at the end of 2021 on November 16th.

Brett (03:20):

I mean, you almost have to laugh when you see a number that big.

Tommy Cloud (03:24):

Unbelievable, Brett. Twenty-five percent of the gross domestic product, in fact.

Brett (03:28):

I remember going down to Mexico once when I was younger and that a 10,000-peso bill could buy you, I don’t know, a Coca-Cola. And you’re like, what kind of banana republic have I walked into? Now seeing an article like this, it’s us. We’re that banana republic.


Tommy Cloud (03:47): 

It is us. During World War II, it was 4.7 trillion. We’ll talk a little bit about that and some good news following World War II. But in this article, they’re saying the only thing they can compare the money printing to is the war due to its historic expense. Yet, the 13 trillion we’ve spent on COVID is more than the US has spent during its 13 most expensive wars, combined. So, you really want to soak that in and think about that. Thirteen trillion, whereas[KM4]  5.2 trillion is the total cost of our wars since 2001. It’s just a lot of money printing, Brett. When you think about it, it’s amazing how much of that they’ve done for this thing.

Brett (04:41):

I read something that in the last two years, it represents 20 to 25% of all dollars printed [crosstalk 00:04:52].

Tommy Cloud (04:51):

Yeah. Well, COVID-related.

Brett (04:55):

Right. That they printed in response to the pandemic.

Tommy Cloud (04:59):

It’s unbelievable. So what happened after World War II is the question, along with what’s happening right now with all this. One thing to consider, Brett, is that if you remember, energy prices were held at bay for a while. Now, over the past year, they’re up 29%. The kicker is that gasoline itself is up 50% on average over the last year: a 50% increase in gasoline. Food prices are up 6.3%. What about this one, Brett? Here’s another one that I’m looking at. Used car and truck prices are up 37% over the past year. These are Brazilian-type numbers. This is crazy. Used cars go up 37% in one year?


Brett (05:58): 

It’s a lot, and it’s jarring. We’re not accustomed to it as Americans[KM5] , seeing this movement [crosstalk 00:06:05].

Tommy Cloud (06:04):

Have you noticed it?

Brett (06:07):

Oh yeah. Just going to the gas station to fill up the tank, you see it. The cost of food is outrageous. If you buy really healthy food, then it’s even more outrageous.

Tommy Cloud (06:18):

Which we do.

Brett (06:20):

And it’s hit on multiple levels as all the stuff’s moved to market. On top of the raw materials, input costs are going up across the board. Moving all those raw materials is done with petrol, which means you’re taxed by inflation a number of times before you even get out the wallet.


Tommy Cloud (06:41): 

It’s very deadly with what they’re doing, and Joe Biden’s approval rating has dropped significantly. Let’s not make light of that. Inflation is just killing what he’s trying to do. He’s trying to gain confidence for a second term, but these gasoline prices are going up 50% in a year: unprecedented stuff. Now, that’s the bad news with respect to price increases. But back to World War II. The war ended in 1947, Brett. I want to share my screen with you here and talk a little bit about what happened to the stock market back then. When you look at the fifties, it was our best year ever for stocks: 19.5% per year for the stock market, which many of us already knew. With the money printing…World War II ended in 1947, I believe, after beginning in 1939…something like that. 

Tommy Cloud (07:44):

But Brett, here’s the thing. Nineteen-and-a-half percent…if you look at the forties and fifties, the stocks went up 8.5%, which is still a good increase. But if you consider recent times over the past decade, you can see that stocks went up , 13.4% per year, before all this money printing started in 2020. And I’m concerned because stocks lead. They can “see” what will happen in the future, so to speak. So, if they see an economic expansion coming, they’ll go up way before it even happens. Likewise, if they foretell a recession or depression, they’ll go down accordingly.


Tommy Cloud (08:32): 

And we’ve already had a 13.5% average increase per year for an entire decade that we just got out of, if you can see my screen there. So what I’m concerned about is that the stock market increase is it’s already baked in. The experts are suspecting this, which is a whole other discussion. When we talk about people like John Vogel, he’s expecting stocks to go up 3% a year. Morning Star’s around that too. Predictions all around average out around 3% a year when you look at the experts. So, if the stock market’s only going up 3% and interest rates rise, which means bonds are going down, it really begins to look a lot like the seventies where we had stagflation.

As Hank Williams Jr. famously sang, “The interest is up and the stock market’s down,
And you only get mugged if you go downtown.

Brett (09:27):

Excellent rendition of that. We should have you sing more often, that’s for sure.

Tommy Cloud (09:30):

Thank you so much. But that’s all we have time for right now, Brett. It’s crazy. Got to quit printing that money, baby.



Brett (09:43):

If people want to talk to you about stacking up and establishing significant retirement funds and protecting their nest egg while potentially facing more of these inflationary times, how could they get ahold of you for, say, a free conversation/consultation?

Tommy Cloud (10:05):

I appreciate you asking there, Chief Wanataska. They can visit my website, click on “Get started now,” and then schedule a call.

Brett (10:18):

Wait. Who are all those handsome men there? Paid actors, right?

Tommy Cloud (10:23):

Well, first of all Brett, I just want to share that they’re all married. I’m sorry.

Brett (10:29):

Wait, I recognize one of those guys. That one in the middle of the [inaudible 00:10:34].

Tommy Cloud (10:34):

Thank you.

Tommy Cloud (10:42):

Goodness gracious. Or they can call me at 1-800-917-5016. Brett, it’s always a pleasure. I love you, my brother, and I appreciate you doing this with me today.

Brett (10:53):

Outstanding. Thank you so much, Tommy. I’ll see you next time.

For more on inflation you can read another article Tommy wrote titled, “Will hyper inflation happen and affect my retirement?”: https://thirdactretirement.com/blog/hyper-inflation-affect-retirement 

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