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I’m getting uninterested in politicians’ scapegoating on inflation.
President Joe Biden blamed inflation on Russia.
And Democratic senators Elizabeth Warren and Bernie Sanders blamed inflation on value gouging by firms.
They’re not telling you the reality.
Inflation got here from world governments’ personal actions.
The primary straw was their response to COVID.
First, they shut down the financial system in response to the pandemic. This decreased demand, and corporations needed to restrict provide.
Then they handed out stimulus checks like sweet whereas ramping up quantitative easing and chopping charges.
With more cash to spend, demand got here roaring again. However provide wasn’t geared up to maintain up.
The subsequent straw was their tinkering with the world’s vitality market.
Governments turned their again on fossil fuels. They shut down vitality infrastructure on house soil.
This restricted home provide and elevated dependence on different international locations for vitality.
Then world tensions with Russia escalated. Their response was to cease commerce with Russia, a big world vitality provider.
All of this led to the best inflation ranges in 40 years. However the authorities gained’t let you know that.
Nor will they let you know the remedy.
The remedy isn’t one man placing his ego apart.
The remedy isn’t firms chopping already-thin revenue margins.
The remedy will come from a lab.
An Different to Fossil Fuels
Artificial biotechnology would be the world’s inflation killer.
This business modifications DNA to kind one thing new.
It has the potential to recreate many supplies and merchandise that we depend on right now.
One of the crucial incessantly studied use instances is for biofuel.
Biofuels are renewable vitality sources created from vegetation or animal waste. They will function different vitality sources to fossil fuels.
Researchers are experimenting with totally different artificial biology to enhance crop yield.
As yields enhance, biofuel manufacturing turns into cheaper.
Decrease prices would encourage biofuel use. That may assist cut back the world’s dependence on vitality cartels.
With much less dependence on different international locations, there’s much less threat of a provide shock.
Provide shocks can enhance costs and trigger inflation. We’re seeing this occur now on account of the Russian sanctions.
Holding Meals Costs at Bay
Artificial biology may also be used to cut back meals prices by creating a particular form of micro organism.
Research have proven fertilizer containing the micro organism was extra environment friendly for corn manufacturing.
It let farmers use much less fertilizer whereas rising yields by roughly 3%.
Fertilizer can account for 30% of a farmer’s working prices. So extra environment friendly manufacturing will assist maintain meals costs down.
This has by no means been extra necessary. Fertilizer prices have spiked 300% since 2021.
Pure fuel is an enter for fertilizer. So the value enhance might proceed to climb as a result of Russia battle.
Artificial biology could provide the answer to maintain fertilizer prices decrease. In flip, it can assist maintain meals costs at bay.
There’s Super Upside for Artificial Biology
Biofuels and fertilizer are just some use instances for artificial biology.
It’s additionally utilized in drug growth, cosmetics, fragrances and bioplastics.
The business continues to be within the early phases. However there’s large upside.
MarketsandMarkets forecasts the artificial biology market to succeed in $30 billion by 2026.
That’s up from $10 billion in 2021.
To get publicity to the market, you should purchase the World X Genomics & Biotechnology ETF (Nasdaq: GNOM).
Because of weak point in genomics shares, the exchange-traded fund has been crushed up over the previous yr.
However now you may get in close to its 2020 lows, which affords a lovely entry level.
Regards,
Steve Fernandez
Analysis Analyst, Strategic Fortunes
Morning Movers
From open until midday Japanese time.
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