Inflation

Here is a great article outlining the basics of inflation, how it works, who benefits, and who is responsible for it.

Another effect of inflation that the article didn't mention is that many people feel they have little choice but to invest in the stock market because they cannot depend on their savings to retain value over the years. This would benefit the Wall Street gang.

One thing I get from this article is that one cannot hope to invest intelligently unless one has a good understanding of how out society works, and that it is always in the interests of the powerful to lie to you. The standard condition of a society is to be run not for the general good but for the benefit of some elite group.

They want your money, they want your dependence and they want your continued ignorance. Let us all strive to leave them disappointed.

http://www.financialsense.com/editorials/saxena/2010/0115.html

Pig Slaughter

Dr. Faber lowers the boom, gloom and doom!

Here Swiss investor Marc Faber expresses concern that the PIIGS (Portugal, Ireland, Italy, Greece, Spain) might default and that the Euro could be hit hard by such an occurrence. He points out that before a country defaults they often print a lot of money and this results in hyperinflation.

He also mentions how one way for a government to distract attention from the destruction of the country's economy is to go to war. I guess there comes a time when even the Super Bowl halftime show cannot keep them all in awe. Unfortunately the United States has a penchant for invading certain countries these days. If I lived in the Middle East, I'd get ready to duck. If I lived in the PIIGS, I'd buy a little gold and silver.

The Winds of Change ...

... they are a blowin'.

Bill Bonner summarizes many of the problems facing the world economic system today in this foreboding article. These 'we don't know what's around the corner but it might have big pointy teeth' articles are getting to be routine. Not that folks don't need to hear them.

"A rising power acquires gold. A fading gives it up." Here he is referring to other countries (primarily the BRIC boys) buying gold and western countries selling. I think it's true of people as well. Someone who owns some gold or silver (or other things like land) has more power than someone with a bank account. If you own some tangible assets than you are not 100% dependent on the monetary system and you are somewhat protected from its convulsions.

A Warning

More on Food ...

Here is a lengthy article detailing the case for food shortages in the near future. This guy seems convinced that it will come in 2010. I don't want to get into the business of making concrete, time-specific predictions but I think the main thing to remember is that whether it comes this year, next year or 5 years from now, it is a real problem that would have a huge impact on our lives.

2010 Food Crisis for Dummies

Other Things to Store (Besides Gold)

Gold is a sensible part of any investment portfolio but I encourage people to look at other alternative investments that will work commensurate with gold in securing and safeguarding your life and wealth.

One of these is food. There are various reasons why it makes sense to store a reasonable supply of food in your home.

1. Your going to eat it anyways. It is simply practical to have 20 cans of tomato sauce if you make pizza often. Storing it means you don't have to go to the shop as often.

2. The price of food has consistently risen over time, and many think it will continue to rise. If you buy a can of beans in January and come August when you actually eat it, the price of beans has risen, you saved yourself money.

3. Buying opportunities. When you have to buy some canned corn for the dinner your planning, you have to buy at whatever price it's selling at in the store you go to. When you have corn stored up, you don't have to buy at random times; you can hold off until you see a really low price at some store that is trying to unload a bunch of extra stock (this happens with regularity). Storing foods allows you to take advantage of these opportunities.

4. Food shortages. History is replete with cases of food shortages and (just like with the story in the previous post) it is hubris to think that it can never happen to you, your community and your nation. Having food stored up means you have a cushion against any such 'disruption' in the food supply. Remember, food production and harvest is subject to all sorts of variables and changes in weather and can cause many people to go hungry.

"Food Crisis" Warning in India