When we think of inflation we generally think of "Price Inflation" i.e. how much the price of a good or service has increased in dollars. However, price inflation is not "monolithic" that is, they don't all increase at exactly the same rate. Some prices will increase faster or more than others. So it is often useful to compare the price of one commodity to another to see the relative increases of each. Over the years we have compared a variety of different commodities including Gasoline vs. Oil and Oil vs. Bitcoin. We've even done a 3-way comparison of Gold vs. Dollar vs. Bitcoin. But since gold is historical money it is useful to use it as the standard yardstick. So we have updated … [Read more...]
A Stock Pickers Guide To Thinking About Inflation
Stock investors sitting on cash and watching the stock market soar to new highs shouldn’t be faulted for missing out on above-average historical returns in 2020. Inflation, along with increasing signs of a market bubble, is a growing area of concern so the prospect of investing in tech giants valued at more than $1 trillion isn’t as appealing as it once was. But investors know that sitting on a portfolio near 100% in cash will see their net worth suffer as a result of inflation. To protect against inflation, investors should consider some of the most popular stocks as of April 2021 as some of them double as a hedge against inflation. Commodity Stocks Offer A Hedge… And A … [Read more...]
Inflation and Your Retirement Nest Egg
Inflation has a big effect on the future value of our nest egg. As we begin to think about retirement we dream of our "magic number" that amount of money that we will need to retire comfortably. But with the rate of inflation constantly changing in is like trying to take aim at a moving target. To make matters worse it's not just the value of the money that is changing it is also the amount of interest you can earn on that money. With the FED actively working to keep interest rates low your savings often earn virtually "Nil" in the way of interest and to make matters even worse once inflation and taxes take their bite your nest egg might actually be shrinking. In today's article Dennis … [Read more...]
Wanna Beat Inflation?
In a recent article entitled Is Gold really a good Inflation Hedge? I showed the history of Gold and how it really was a fear hedge rather than an inflation hedge. Interestingly, I just read an article entitled "Wanna Beat inflation? Forget Commodities!" by newsletter author Dan Ferris. It seems almost like heresy to hear that statement from Dan since he writes commodity and oil-based newsletters. But some of the statistics he presented were very interesting so I thought I would pass them along to you. … [Read more...]
Protect Yourself From Inflation
Inflation Warning!!! How do you protect yourself now? In a recent article, I discussed how Gold was not strictly an inflation hedge but more a crisis hedge against worry of all sorts. See How has Gold fared as an Inflation hedge? In another article, How the Iraq War will affect the U.S. economy, I discussed how a wartime economy almost guarantees future inflation. So naturally several readers wrote to ask, “What is the best way to protect against inflation?” … [Read more...]
