“We are not out of the woods yet on inflation,” JPMorgan analysts led by Marko Kolanovic wrote Monday.

I agree actually. In fact, I think the odds of developed market inflation settling back near 2% reliably and sustainably are quite low.

That’s not to say we won’t see periods of price stability (as arbitrarily defined by policymakers). It’s just to suggest “we’re not in Kansas anymore,” as Judy Garland might put it. The “Great Moderation”‘s over, the “peace dividend”‘s no more, Western electorates are more skeptical than ever of globalization and on and on. You know the narratives.

Macro volatility’s here to stay. That’s my view anyway. And in many respects, that’d mark a reversion to the historical mean for humanity. Conflict, friction, booms, busts — that’s our nature. Just because we advanced enough as a species to make utopia possible doesn’t mean we’ll realize utopia. Global hunger’s a good example: Nobody has to starve in the 21st century. All hunger’s man-made at this point. And yet, people starve (to death in some cases) every, single day.

Bottom line: The Western world and advanced economies in general got lucky in the three decades beginning in the mid- to late-1980s. And even there, a lot depended on who you were. The globalization era was a veritable death knell for American manufacturing, for example.

Our luck ran out in 2020, though. Now we’re rudderless more or less, careening from catastrophe to catastrophe, not sure what plague, war, natural disaster or other calamity might befall us tomorrow. Last week it was earthquakes. Next week it’ll be locusts maybe.

I digress. Badly. The point is: It’s probably unrealistic to expect well-behaved inflation outcomes going forward. And that means you might want to hedge.

When it comes to hedging, you could buy gold. Somebody sure as hell is. Yellow metal’s made a succession of record highs over the course of a stunning six-week rally.

Or you could buy digital gold. A couple of weeks ago, I noted that Bitcoin’s back to being worth more than a “very respectable Benz.” One reader emailed me that afternoon to say my comparison (between Bitcoin and a mid-tier Mercedes) motivated him to take some profits.

Or you could buy my favorite inflation hedge: Energy stocks. Regular readers know I’ve liked them (energy shares) since early 2020. I still like them today. The payouts are good and as noted in “Drill It Up,” I have exactly no faith in our species’ collective willingness to break the fossil fuel habit.

Kolanovic agrees. Or at least on the preferred inflation hedge part. “The current backdrop of above-trend growth raises the risk that inflation will re-emerge as a problem for both central banks and markets,” he said Monday, in the course of reiterating the bank’s commodities Overweight. Here’s a bit of additional color from Marko:

An end to goods price deflation coupled with higher energy prices is putting upward pressure on input costs for business, which in turn raises the risk of a spillover into services prices as companies try to protect their margins. The recent steep rise in short-dated inflation breakevens is a warning sign to which equity markets are not paying enough attention in our opinion.

He went on to say that recent gains for oil prices are “hitting the global economy at the same time as shipping disruptions and stronger demand put upward pressure on goods prices.” The bank’s commodities OW is “focused on Energy.”

Guess who agrees? Besides me, I mean. Morgan Stanley’s Mike Wilson, who reiterated his own Energy Overweight on Monday.

Recall that Wilson upgraded Energy last month citing compelling fundamentals and support from commodity prices.

“Recent strength in [oil] points to continued relative outperformance, in our view,” Wilson said, in his latest, referencing the simple visual on the left, above.

That’s hardly the end of the bull case. Wilson also reminded investors that Energy boasts “the largest upward inflection in earnings revisions of any industry group over the past two, four and eight weeks,” while the bank’s analysis (shown on the right, above) suggests Energy’s “the second-most undervalued industry group for a potential higher growth regime.”

So, if you have any hedge budget left after splurging on $2,350 gold and $71,000 Bitcoin, maybe consider some oil and gas stocks. (Not investment advice. All standard disclaimers apply. Void during a solar eclipse. Burn after reading.)