Hyperinflation Here We Come!

Are you prepared for hyperinflation?
Here’s why it can be a good idea to prepare.

With all of the reckless government spending, many are becoming concerned about the potential devastating effects of inflation. Significant inflation is not only feasible, it is very likely. We are seeing the warning signs with food and energy prices!  I wanted to take a few moments to update you on what is going on in the economy, how inflation can be dangerous, and provide several investment ideas that will help us fight inflation in the upcoming days.

Why is inflation inevitable?

With Democrats and Republicans alike agreeing U.S. debbts are out of control, but no one has a plan to solve our current deficit let alone the whopping debts we have.  The Fed has the solution: print more money, devalue the dollar, and pay back the debts with cheaper dollars.  What's the price tag?  Can you say H-Y-P-E-R Inflation! This will mean we will see massive inflation like never before.  This double digit inflation is imminent unless the Fed and/or U.S. Government takes one of two drastic measures:

We really only have two ways to pay for our debts:

(1) Print more money, which causes inflation, and/or

(2) Hike taxes, which kills investment, businesses and jobs.

Why is inflation dangerous?

Inflation simply means rising prices. But in addition to retail price inflation measured by the Consumer Price Index, you also have monetary inflation - the growth of the money supply, or the total amount of money in the economy. (Our money supply includes dollars, checking and savings accounts, CDs and money market funds, and short-term transfers of securities in exchange for cash.)

Here is the great balancing act of the Federal Reserve. If it eases the money supply (think lower interest rates), borrowing costs decrease, and investment generally increases. But with easy money, price inflation and currency devaluation follow. The Fed can fight inflation by raising rates to effectively tighten the money supply, but they CANNOT afford to raise rates as the US would be unable to service her debts!

Is the Fed helping or harming the economy?

My opinion is the Fed is destroying the dollar and America's near-term future in the process. We must realize that market intervention is magnifying, not solving the problems that caused the crisis! The Fed's actions have only delayed and worsened the original financial problems!

What do you do in the meantime?

There are many ways to protect you and your family from the potentially dangerous effects of inflation. Hard times for America do not necessarily mean hard times have to come for you. No matter what the economy is doing, no matter what the state of financial markets are there is always a strategy available that can make you money. The key is to recognize opportunities wherever they may be and, more importantly, detach from old investment strategies that are no longer working.

Here is a list of inflation protection securities. Please note these are a list of suggestions. Many of these do not appear in our recommended portfolios at Faith-Based Investor as of yet. Please do your own research before purchasing. Here are six ETFs and six stocks poised to do well if inflation takes off:

6 ETFS

IShares US TIP Securities TIP
IShares COMEX Gold IAU
IShares Silver SLV
Proshares Ultrashort 20+ Year Treasury TBT
Proshares Ultrashort 7-10 yr Treasury PST
SPDR Gold GLD

6 STOCKS

Silver Wheaton  SLW
BHP Billiton Limited BHP
Freeport-McMoRan Copper & Gold FCX
North American Pallidum PAL
Rio Tinto PLC RTP
Yamana Gold AUY

Let's be realistic!

The next several years may be the toughest ones for Americans in their lifetime. However, they do not need to be tough years for you if you prepare ahead and follow sound investment advice. We here at FaithBasedInvestor.com seek to be a trustworthy, reliable source for your financial advice for years to come! You don’t have to go it alone. We’re here each step of the way.