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Inflation on the Rise Again…Position Yourself so You Don’t Pay the Price!
Inflation is on the rise again! Check out the chart below and you’ll see the CRB Commodity Index breaking its downtrend.
Conveniently, this comes right after the Fed announced that interest rates would remain low through late 2014, thus driving down the dollar and running up inflation. However, in the end, the government will blame Wall St. for driving up inflation but Wall St. doesn’t control any printing presses or the level of interest rates.
So how do you combat the “robbery” from the Federal Reserve? You buy assets that appreciate as inflation rises, such as commodities, gold and foreign currencies. You can additionally short the dollar against these assets.
Whatever you do, make sure you own some of these….because the latest “war against your wealth” just began when the Fed announced interest rates on Wednesday.
Make sure you have a forex account where you can trade currencies or a stock brokerage account where you can buy up commodity ETFs, currency ETFs and stocks that benefit from the decline of the dollar. The former two benefit the most in inflationary times but all three are beneficial.
The one that will be left “holding the bag” is the one that just earns a dollar-denominated paycheck and deposits money in a savings account or money market account or dollar-denominated CDs only. Yes, everyone needs some money in savings, money market, etc. None of these financial instruments keep pace with inflation. Making them your main investment venue will only cause your dollars to erode slower than putting them under your mattress.
Invest instead in things that benefit from the dollar going lower: commodities, gold, foreign currencies and some blue-chip U.S. stocks that have large international operations that benefit from the fall of the U.S. dollar. These are some of your best ways to combat the “war” that the Fed and government at large have waged upon the money in your wallet.
Sean Hyman
My E-Book
info@worldcurrencywatch.com
Editor, Currency Cross Trader
Other Posts from the Author
- What's happening in Greece could happen in America if we're not careful! - February 15th, 2012
- Oil Heads Higher as Super Tankers Stop Shipping Iranian Oil! - February 14th, 2012
- Revisiting the Iraqi Dinar Issue Again... - February 13th, 2012
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