2009 July 08 « Reviews and Views

Inflation and the Dollar

In an article by Sol Palha, several interesting thoughts on higher inflation were made. You can see the entire article by Sol Palha of Tactical Investor at Financial Sense University (http:..www.financialsense.com/fus/editorials/ti/2009/0626.html).

Some of the items that interested me were….

Inflation is defined as an increase in the supply of money and not an increase in the cost of goods.
A direct result of inflation is an increase in the price of goods. It is a symptom but not the cause.
Because the money supply has dramatically risen in the last 12 months, it appears that we have drug addicts driving the printing press to the breaking point.
Hyperinflation is moving closer to a reality with the passage of each day.
The next 6-9 years are going to produce profound changes. These changes will be so extreme and deep that it will literally stun the unprepared, for the majority have not and will most likely never again be exposed to such dramatic forces again in their life times.
What should we do?
1. Eliminate all debt (or as much as possible as quickly as possible).
2. Live 1 to 2 standards below your means (choose to live at a lowest standard of living now, before it may be pressed upon you).
3. Save the difference (produce more than you consume and put aside the difference into savings).
4. Invest in bullion and commodities (if you invest at all, do so where you think best. There are many “advisers” with various opinions as to where your hard-earned money should go. But you may want to continue approaching matters of personal finances cautiously).