RBA Says Inflation is Easing. Does Your Wallet Agree?

Streets filled with a mix of electric vehicles and gasoline-powered cars.

A public tired of government corruption, vested interests and powerful elites pulling the strings on global affairs.

Media headlines dominated by the T word: Tariffs.

And a president looking to grab the land surrounding one of the most valuable stretches of water on Earth: the Panama Canal.

You’d think I’d taken a round-up of some of the major headlines from 2025.

But I didn’t…

All these events took place over a century ago!

And at the centre of it all was a president unafraid to challenge the status quo—just like today.

The former US President back then had a lot in common with Trump.

A controversial leader who enjoyed flipping and mocking the entrenched political class. A reformist who took pride in tearing apart America’s biggest monopolies, like John D Rockefeller’s Standard Oil.

One of the most powerful companies ever incorporated.

At the turn of the 20th century in North America, the backdrop was tumultuous and volatile.

The parallels were uncanny to today!

So, who was leading America back then?

It was a bloke called Theodore Roosevelt… One of the most popular American leaders of all time. I’m not saying he’s a direct comparison to Trump!

But what’s the point I’m trying to make?

Events have a funny habit of repeating, not precisely, of course… But as they say, there’s a familiar rhyme to how things unfold.

Like people repeating past mistakes, especially in financial markets.

That’s why it pays to keep at least a passing eye on history.

But as someone who looks at commodity markets, where prices are cyclical, moving from boom to bust, you have to dig much further.

Earlier this week, I showed you why we could be heading for a possible hyperinflationary 1970s repeat in the not-so-distant future.

That’s a controversial call, given that the RBA just announced this week that headline and underlying inflation are falling within the RBA’s 2-3% target range.

But as consumers, there’s a real sense that ‘official’ inflation numbers may not be telling us the entire truth… Costs keep rising, incomes remain stagnant.

And as I pointed out earlier in the week, Ray Dalio, one of the most successful hedge fund managers in recent memory, agrees.

That’s despite ‘official’ inflationary numbers also easing in the US. But he still believes that a 1970s hyperinflationary repeat is on the way.

He shifted part of his wealth into gold to hedge against this risk.

Insiders like this offer valuable insights.

But given that the ‘smart money’ also tends to move into bonds, this is another clue worth tracking.

Below, I’ve taken a chart of the Schwab Treasury Inflation Protected Securities Index Fund, or ‘TIPS’:

TIPS are a type of Treasury bond that is indexed to inflation, protecting investors from a decline in the purchasing power of their money.

Put simply, when the face value of TIPS is rising, so are long-term inflation expectations.

And as you can see, after bottoming in late 2023, they’ve gradually been trending higher since.

That’s one more clue that the smart money is heading back into TIPS, hunting for long-term ‘inflation protection.’

However, as I showed you earlier in the week, investing in commodity stocks is another strategy.

Companies generating earnings from extracting raw materials, tangible assets, that protect your wealth against REAL inflation risks.

At Diggers & Drillers, I offer readers a basket of commodity stocks, covering mining services, precious and base metals, and energy.

All companies that I believe will offer investors long-term inflation protection.

You can find out more here.

Until next time.

Regards,

James Cooper,
Editor, Mining: Phase One and Diggers and Drillers