Inflation’s Choking Your Retirement

What’s a “DoorDash Grandma”?

The president had a photo-op yesterday — getting a DoorDash delivery to spotlight the fact that tip income under the “Big Beautiful Bill” is no longer subject to income tax.

(Well, as long as your income stays under a certain threshold. And this tax break expires after 2028.)

Unfortunately for the White House media team, the message about “no tax on tips” got overshadowed on social media by bigger questions…

Which leads to a more personal question…

Do you want to spend your “golden years” in the gig economy?

I dunno, maybe you do. I remember a guy who was well-compensated for decades as chief meteorologist on Chicago’s top-rated TV station.

He retired to Naples, Florida in 2018 and became an Uber driver so he could stay busy and meet interesting people. The Chicago Sun-Times reported he earned $84.61 on his first day.

Point is, he didn’t need the income. Driving an Uber was a choice.

Choices are good when it comes to retirement.

Unfortunately, your choices become more limited whenever the economy is subject to bouts of inflation — like, right now.

If you’re a newer reader, you need to wrap your mind around the fact that inflation will rule your life for the rest of the 2020s in a way it simply didn’t during the 2010s.

And even if you’ve been around for a while, I can’t reinforce the research enough: Once inflation races past a certain threshold, it typically takes a decade to bring it back to “normal.”

The official U.S. inflation rate topped out in June 2022 at 9.0%. The most recent figure, issued by the Labor Department last Friday, is 3.3%. That’s the highest in nearly two years, and next month’s figure will almost surely be higher.

In 2022, researchers from Bank of America’s U.K. division combed through extensive data going back decades from most of the globe’s developed economies.

They found that once inflation pokes its nose over 5%, getting back to 2% — the Federal Reserve’s official inflation target — takes an average of 10 years.

Let’s take a closer look…

We’ve shown this chart before. As far as we’re concerned, we can’t show it often enough. Again, it will rule your life for the rest of this decade.

This time we’ll spotlight two instances from the United States…

Look at that gray bar on the right. Inflation peaked at a crazy-high 14.6% in the spring of 1980. It took six years for the Federal Reserve under chairman Paul Volcker to get inflation back to 2%. And he pulled that off only by deliberately engineering a vicious recession in 1981–82 — at that time, the worst recession since the Great Depression.

But then inflation reared its head again in the late ’80s — peaking at 6.4% in the fall of 1990. Look at the other gray bar. As you can see, it took the Alan Greenspan Fed a full eight years to get inflation back to 2%.

➢ Note well: This time around, the clock started in May 2021 — when the official inflation rate first touched 5%. We’re not even five years into this thing.

Nor is this study unique. A separate 2022 study conducted by the firm Research Affiliates arrived at the same broad conclusion: “Above 8% [inflation], reverting to 3% usually takes six–20 years, with a median of over 10 years.”

Here’s how inflation can wreck your retirement if you’re not careful.

Say you’re living off an income of $100,000 right now — and your cost of living rises 4% a year.

After 10 years, you’ll need $148,000 in income just to maintain your current standard of living. After 20 years? $219,000. And after 25 years, you’ll need $267,000.

How can you possibly keep up?

At Paradigm Press, we’re especially fond of a proven income-producing strategy that’s won the approval of both our macro authority Jim Rickards and our AI authority James Altucher.

We mentioned the recent performance of this strategy yesterday — generating a 105% gain during the first two months of 2026. That’s despite an array of market-moving events from the panic in software stocks to the looming Iran war.

Join us Thursday in an event called The Insiders Suite and you’ll learn how to put this strategy to work for yourself.

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Has the Blockade Been Tested Yet?

So… How serious is this U.S. blockade of Iranian ports, really?

The Wall Street Journal’s front-page article today sheds zero light on the central question surrounding the war so far this week. It’s long on rhetoric from both Washington and Tehran, short on the nuts and bolts about whether U.S. warships really are halting the flow of shipping that violates Washington’s dictates.

Here’s what we can piece together. Shipping data from the firm LSEG shows that a Chinese-owned tanker called the Rich Starry transited the Strait of Hormuz yesterday. The Rich Starry is subject to U.S. sanctions. An additional U.S.-sanctioned vessel also passed through the strait.

Meanwhile, a Panama-flagged ship called the Peace Gulf transited the strait today, headed toward the United Arab Emirates.

Does that mean the blockade is all for show and not for go? Not necessarily. “As the three vessels transiting the strait were not heading to Iranian ports, they are not affected by the U.S. blockade,” says Al Jazeera.

So that tells us either the blockade is effective — or it hasn’t yet been put to the test.

A handful of foreign press outlets played up a statement attributed to the Chinese defense minister saying, “Our ships are moving in and out of the waters of the Strait of Hormuz… Iran controls the Strait of Hormuz and it is open for us.”

Strong words. But they don’t turn up in Chinese state media — so for now we’re giving it the side-eye.

And so we’re still left with the question we were pondering yesterday: What happens when the U.S. Navy encounters a Chinese ship with a Chinese flag? Will U.S. forces try to board it and seize it?

Come to think of it, wouldn’t that wreck plans for Donald Trump’s meeting in Beijing next month with Chinese President Xi Jinping?

To be continued…

In the meantime, the global oil supply crunch is about to get real.

“The last oil tankers to traverse the Strait of Hormuz before the outbreak of war will reach refineries in the coming days,” says the Financial Times — “in a pivotal moment analysts warn could herald physical shortages in Europe and the U.S. within weeks.”

Yes, the United States. “With Asian refineries responding by buying up a record number of crude oil cargoes that would normally have sailed to Europe and the U.S., analysts said refiners in some of the world’s wealthiest countries may soon also face shortages.”

The last ships that departed the strait before the war began are expected to arrive in Malaysia and Australia by next Monday, give or take.

So oil prices are leaping big-time right?

Yes and no. Read on…

More Than One Oil Price

The gap between the “paper price” of oil and real barrels for delivery remains yawningly wide.

There’s continued chatter from the White House suggesting the prospect of some sort of resolution to the conflict despite the breakdown of U.S.-Iran talks on Saturday. As such, a barrel of West Texas Intermediate has sunk to $93.50 — down from nearly $105 when trading opened for a new week on Sunday night.

But those are just oil futures. Real barrels recovered from the North Sea went for $148.87 yesterday.

Gaps like that can’t last forever — and something might be about to come to a head early next week.

As mentioned above, the last barrels that transited the Strait of Hormuz before the war began will reach their destination on Monday. Tuesday brings the expiration of May oil futures in New York. And that’s also when another U.S. aircraft carrier will likely arrive in the Middle East.

Why is it taking the long way around the Cape of Good Hope? Because Navy commanders remember the hell delivered by Yemen’s Houthi faction in 2024–25. They shot down nearly two dozen Reaper drones… while evasive maneuvers by the carrier USS Truman led to an F/A-18 jet sliding off the deck and into the drink.

For the moment, however, the “paper oil falling, stocks rising” trade remains in force.

The S&P 500 is up another 1% today. At 6,954 the index is now slightly higher than it was when the war began — and only a third of a percent below its record close on Jan. 27. The Dow’s gain is more modest, while the Nasdaq is up 1.6%.

➢ Congratulations are in order for 10X Trade Club members — who yesterday booked their first 1,000%+ gain playing call options on Oracle. Another 10X winner might be in store by Friday with Microsoft.

Gold just pushed past $4,800 and silver has screamed past $79. And the crypto rally might be for real this time — Bitcoin over $75,000 and Ethereum at $2,368.

The euphoria on Wall Street stands in contrast to a dour mood on Main Street.

The National Federation of Independent Business is out with its monthly Small Business Optimism Index.

The headline number tumbled from 98.8 in February to 95.8 in March. The number is now back below its long-term average. (And we do mean long-term. The NFIB has conducted this survey since 1973.)

“Inflation has caused significant hardship in rebalancing our budget,” says the owner of a services business in Michigan. “Sales are down, and customers are extremely price conscious,” says the owner of an agriculture-oriented business in New Jersey.

“The dramatic spike in oil prices has spooked consumers and owners alike,” says NFIB chief economist Bill Dunkelberg. “Small business owners are having to absorb those higher input costs and pass them along to their customers.”

Comic Relief

Continuing with the theme(s) above…

Mailbag: Kirk, Politicians and “You Get What You Pay For”

“While none of us ‘knows’ who killed Charlie Kirk,” a reader adds to a recent thread, “there is a pile of publicly available evidence that points to a disturbed fellow named Tyler Robinson. We’ll see how the trial turns out.

“More importantly, speaking for myself, I regret that he is being turned into a political football after his death. Though he had strong political opinions, to me his primary virtue was in his strong Christian belief system and fearless advocacy of those beliefs.

“Thank you for allowing me to insert that perspective into the conversation.”

“Thanks for writing what you do. You report what you see and it's up to us to draw conclusions,” a reader writes after your editor took a few slings and arrows recently (including yesterday.)

“Trump has lost a lot of us because of this war and overspending. His lack of transparency on the Epstein files didn't help either. 

“But his stupid attacks on Tucker and Megyn are just nuts. These people helped him get into the White House. Mark Levin was a Never Trumper. 

“I'm pretty much done with politicians, not a single one of them is worth a s*** and what gives them the right to rule over me?”

Dave responds: The meme-o-sphere, as always, is on the case…

Finally, a longtime reader responds to yesterday’s sling and arrow — specifically the line about “you are a stock analyst, and I am a paying client.”

“I know that it must be you getting old,” the reader writes — “but you forgot to remind said customer that 5 Bullets is a free benefit to all Paradigm subscribers.”

Dave: So true. But I’m going to attribute my oversight to the fact I’ve been processing a tsunami of information since this stupid war began and not my advancing age!