In your mind picture a spiral.

How much of the United States economy is based on annual CPI adjustments?  I think most of the government sector:  Federal, state and local, schools districts etc. budgets and employment contracts are tied to CPI.  Senior citizens pensions and social security is tied to CPI, along with most other entitlements.  So we are  talking about 20 percent of the economy plus 20 percent of the consumers share of the economy or 12 percent of the total economy represents those consumers whose income is directly tied to CPI for a grand total of 32 percent of the United States Economy on auto-pilot mark-ups.

Headline CPI was what 4.3 percent year to date and another month like November, we could print five percent!  With a third of the economy on auto-pilot increases, we automatically build in 1.75 percent of inflation economy wide for the coming year.  Inflation begets more inflation. 

If you need to own bonds, own TIPS or high-quality variable rate notes. 

At this point I recommend a neutral currency stance no over or underweights, but you should have an allocation to international stocks and bonds.