Hey all,
A bit about me. I read a lot, I watch the markets, and I think about how to protect and grow money when the world changes. Right now, a lot of people are worried about prices going up, homes changing value, and what to do with savings. I’m going to walk you through what’s happening, why it matters, and practical steps you can take.
WHAT HAPPENED IN THE 1970s
I like to start with a story because it helps me remember facts.
In 1972 the median home price was about $22,000. By 1982 it had roughly tripled to $66,000.
In 1972 oil was about $3 a barrel; by 1982 oil was about $30 a barrel.
If you had $1,000 in 1972, inflation meant it became like $400 in real buying power by 1982 — about a 60% loss of value.
These things show how quickly savings can lose value if prices rise a lot.
RECENT NUMBERS YOU SHOULD KNOW
Since June 2020 the US dollar has lost roughly 25% of its purchasing power.
From about the start of 2020 to 2025, the price of a median US home went from around $320,000 to $462,000 — about a 45% increase.
A loaf of bread that cost about $1.40 in June 2020 can cost about $2.2 today — roughly a 55% increase in that item.
Inflation peaked in 2022 at very high levels (the highest since the 1980s), then fell; by 2025 it was a little above 3% but has shown signs of creeping back up.
In 2025 some big assets performed strongly: gold up ~70%, the S&P 500 roughly +12%, and Bitcoin up over 37%.
CPI vs CORE CPI (WHY THEY MATTER)
The government tracks inflation with the Consumer Price Index (CPI). But there are two versions you’ll often hear about:
CPI (headline) — includes everything people buy: food, energy, rents, medical bills, transport, etc.
Core CPI — removes food and energy so that the number is less jumpy month to month.
Why remove food and energy? Because those prices can swing a lot due to weather, wars, or one-off shocks. Central banks often watch core CPI more closely because it looks smoother and shows longer trends.
But I want to make this clear in plain words:
Food and energy affect real life a lot — they are not small.
Core CPI can hide big pain in the grocery store or gas pump for families.
Today, core CPI is “sticky” — it’s not coming down fast. The main reason is shelter (housing costs) and services.
WHY SHELTER (HOUSING) IS THE BIG DEAL
When I look at the numbers, shelter is the largest part of core CPI. That matters because shelter includes rent and owners’ equivalent rent (a way the government estimates what homeowners would pay if they rented their home).
Shelter is lagging — official shelter inflation is slow to update and often reflects past housing market conditions.
There’s evidence that a fall in home sales today predicts weaker home prices about 18 months later. That means shelter inflation often keeps rising for a while even after home prices start cooling.
I want to draw your attention to the “existing home sales” idea:
If people stop buying homes today, sales fall.
Historically, when existing home sales fall, home prices fall about a year to 18 months later.
Right now, home sales are low. That likely means home prices should stay cool or drift lower over this coming year.
Because shelter is a big part of core CPI, this should gradually help bring core inflation down — but remember the official data can be slow.
REAL ESTATE CYCLES — THE 18.6-YEAR IDEA
There’s a long-run pattern I believe matters a lot: real estate cycles tend to run roughly every 18 to 18.6 years. I use it to understand where we might be in a bigger rhythm.
What that cycle looks like in simple terms:
Expansion (boom): More building, rising prices, easy credit. People feel rich.
Top: Prices peak, credit tightens, and signs of stress appear.
Contraction (bust): Prices fall, construction slows, trouble spreads.
Recovery: Vacancy rates fall, jobs stabilize, and credit gently recovers.
Why this matters to you:
If a big real estate boom peaked about 18 years before the current top, it can help explain why certain decades see big price moves.
Real estate is often the first thing to peak near the end of a credit cycle — then stocks and commodities sometimes follow.
Use the cycle as one input, not a rule. Combine it with current data: mortgage rates, home sales, construction, and lending standards.
FINANCIAL ASSETS VS THE CPI: WHY STOCKS, GOLD, AND BITCOIN DIDN’T SHOW UP IN THE BASKET
I get asked: if stocks and Bitcoin rose a lot, doesn’t that mean inflation? The answer is a bit of yes and no.
Financial assets (stocks, bonds, gold, crypto) are not included in CPI because CPI measures consumer goods and services that people buy every day.
When the inflation goes up and the dollar weakens, some asset prices can rise because investors look for value outside cash. The rise in gold, S&P 500, and Bitcoin in 2025 hints that many investors think the dollar is losing value, or they are pricing future growth differently — but official inflation measures focus on groceries, rent, energy, and services.
COMMON QUESTIONS I HEAR (AND MY SHORT ANSWERS)
Will inflation get as bad as the 1970s again?
It’s possible if big shocks happen, but current data (housing cooling, job openings falling) suggests a return to lower, slower inflation rather than a repeat of the 1970s. However, risk exists.
Should I buy gold or Bitcoin instead of stocks?
Both can help diversify. Gold is a traditional store of value; Bitcoin is speculative and volatile. Use size limits and don’t bet the farm. Remember we are near the peak of the cycle and have risk management in place.
Is real estate safe now?
Real estate is local. National data shows cooling and a possible price softening about 18 months after sales drop. Buy carefully and think long-term. Personally, I have deleveraged all my properties already and also have most of my position in cash.
FINAL THOUGHTS
I care about helping people protect and grow their money in ways they understand. Inflation and economic cycles are real forces that change what money buys. The lessons from the 1970s matter: big changes can destroy savings if you are not prepared. Today, shelter and wages are the big drivers of sticky inflation, but housing data suggests those pressures may ease over time. Still, geopolitics and commodity shocks can change the path quickly.
If you trade, follow a strict risk plan: cut losses fast and size positions carefully. If you invest for the long run, use value principles to buy strong businesses at fair prices and diversify across asset types.
If you find this article interesting, please let us know your thoughts down below here. We also have have other similar articles on our website too.
Tools I use
Sharing with you the tools I’m using at the moment.
Value Cycle Stock Investing Checklist v2026
This is the exact stock screening system I use to narrow thousands of companies down to just a few high-quality, high-conviction investments, growing my portfolio to $400k in 5 years.
Coinbase Crypto Platform - Coinbase
📝 $5 When Join to Track investments, all assets and debt - WeMoney
📊 $15 OFF - TradingView (Charting Tool)
🧾 Crypto tax reports - Koinly
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📚 Books I read: https://linktr.ee/smartxcapital
🧭 Why I’m Building the Smart X Capital Platform
I’m building something for investors who want to move smarter — not faster.
This isn’t for everyone. It’s for those who want to understand wealth through time, not tactics
A place where we’ll track these cycles together, share real-time insights, and learn how to invest with the cycle — not against it. I’ll be offering workshops, tutorials, and in-depth guides to help you build a timeless investing system that grows through every boom and bust.
📚 The Smart X Capital Platform is coming soon — a place to learn, connect, and stay ahead of every major market cycle using data, history, discipline and our community.
🚀 Be First to Join
If you’ve been following my emails and you want to be ready for 2026, now’s your moment.
Because when every major cycle converges — the prepared don’t panic. They profit.
Talk soon,
Ace — Smart X Capital’s Founder
Disclaimer: The information shared in this newsletter is for educational and informational purposes only. It is not financial advice, investment advice, or a recommendation to buy or sell any security or asset. Always do your own research or consult a licensed financial professional before making investment decisions.