The trend going
forward during this economic depression is getting back to basics.
We often discuss, "prepping," as a way to protect your
family in the event of an unforeseen catastrophe (natural or man-made).
Recently, we’ve seen more financial analysts and advisers recommend
shifting from traditional investments like stocks, bonds, CD’s
and money market accounts, to tangible assets that will gain value
regardless of what stock and bond markets do.
we’re not saying you should go out and spend your entire 401k
retirement account on 5 gallon buckets of rice, but diversifying
into hard assets on a variety of levels could be a great investment.
As the US Dollar continues its decline over the coming years, the
price of essential consumer goods is likely to rise. Certain goods,
however, like real estate, cars and anything that is driven primarily
by credit expansion, may experience a deflationary impact in real
dollar terms, while others, like food and energy may see explosive
GOVERNMENT CAN NOT SPEND OUR COUNTRY INTO TRILLIONS OF DOLLARS
OF DEBT WITHOUT CONSEQUENCE.
I am working
on my next set of forecasts and seminars but before they are out,
I want everyone (and I mean EVERYONE) to consider 3 simple things
to gain greater financial peace of mind:
away from paper assets.
your portfolio with emphasis on "human need."
Commodities at Today’s Lower Prices, Consume at Tomorrow’s
Higher Prices we offered some ideas about how to be a "prepper,"
and "investor," simultaneously.
you are a prepper, for example, who is already stocking essentials
foods and goods, you’re way ahead of the game. As commodity
prices continue to rise for a variety of reasons, your "investment"
is paying off in real terms. Buy 10 pounds of rice today for $10,
and when that same bag of rice goes to $20 a year or two from
now, you can say you earned a 100% return on your investment!
And the great thing about your investment, is you don’t have
any counter-party risk, for the most part, meaning that you own
the physical good and it is in your possession – you take
delivery at any time!"
For those interested
in investing some of their wealth into real, tangible assets, consider
the following as food for thought:
Though gold and silver are no longer considered money by most
"mainstream" economists, the fact is that central banks
in China, India and Russia have been continuing to stockpile precious
metals over the last decade, and they will likely continue to
do so going forward. Why? Because as all or most of the paper
currencies around the globe are debased, gold and silver will
become the de facto monetary unit against which other currencies
are valued. As Dr.
Marc Faber has said on several occasions, "Own gold and
become your own central bank." Many contrarian financial
advisers who lean towards the Austrian school of economics recommend
allocating 10% to 20% of your current investment/retirement portfolio
to gold. If you are banking on having that money when you retire,
consider speaking with your financial adviser about purchasing
metals in the form of mining companies or ETFs. If possible,
a portion of your holdings should be in physical bullion like
bars and coins, which will provide added security as you will
have no counter-party risk because you have it in your possession.
As the US Dollar loses value and other countries become hesitant
about funding our trillion dollar debts, the cost of food will
continue to rise. Combine the dollar’s monetary issues with
the fact the many farmers around the world are unable to gain
access to loans to continue or expand operations, and you have
the potential for price increases not just because of dollar debasement,
but supply problems. The other threat for food is that we may
very well experience a perfect storm event, such as that experienced
in the dust bowl of the 1930’s, meaning that heavy rains,
or heat or cold, may affect agricultural output, further straining
supplies and pushing prices higher. Foods like rice, legumes,
pastas, wheat, oats, and canned goods could be purchased today
and stored, in some cases, for up to five years or longer. Consider
the price increases that can happen in these food stuffs over
the next five years and this investment may see significant gains.
And again, you eliminate counter-party risk because you are holding
the tangible assets yourself. (This
video shows how The Survival Mom has dedicated a room in her
home for just this purpose.)
Well-known trend forecaster Gerald
Celente has suggested that one of the mega-trends of this
decade will be living
on less and becoming more self-sustaining. Individuality will
return to America, and a push to distance oneself from the "grid"
will take off for a variety of reasons. Rising food and energy
costs are likely to be two of the major catalysts for this trend.
How can you invest for yourself? First, consider investing your
time and money into skills development like gardening, farming,
sewing, woodworking, or hunting, as these skills can certainly
be an investment that will pay off in the future. While it may
not be feasible for most to become farmers in terms of commercial
enterprise, it can be accomplished on a personal level by those
who have a bit of desire and choose to expand their skills base.
Urban gardens are already popping up all over America as the micro-farming
trend continues to gain acceptance. Even in the suburbs, on a
fifth of an acre of land, those with the ability to think outside
the office cube can grow
enough food to support their entire family for a year.
concerned with rising energy costs, your options are basically
limited to investing in energy stocks and ETFs, or, investing
in yourself and create your own supply of energy. Learning how
to develop and implement a power grid in the comfort of your
own home will not only give you the skills to earn a living
in the future, but to provide nearly unlimited energy for your
household through use of solar, wind and hydro power. Investments
into alternative energies for your home may seem costly, but
not if you consider the rising cost of your electric and gas
bills over the next couple of decades. Sustainable living investments
are not one-off investments, say, like storing a bucket of beans,
but rather, pay dividends forever.
Though not often considered as investments, extra clothing,
especially things like socks, underwear, house shirts, shoes,
sweat shirts and sweat pants, will likely move up in price as
well. While adults may be able to stretch their clothes for
several years without replenishing their closets, children are
a whole different story. If you’ve got kids, this is one
investment that can really pay off. Purchasing graduated sizes
of clothing for your kids with a time horizon of 3–5 years
can really save you money down the road. It is true that in
America today, these items are readily available and imagining
a scenario where these items will not be on store shelves is
hard to do. But consider the East Block circa 1985, and you’ll
have a different perspective. Because of isolationist policies,
closed currency and price controls, these items were very difficult
to come by. If the US experiences a currency crisis, it will
have an immediate and significant impact on the USA’s ability
to acquire goods from manufacturers around the world, as the
price for goods will be difficult to determine because of the
potential for massive currency fluctuations. If not for yourself,
consider stocking some reserve clothing for your kids.
Assets in General
President Chavez of Venezuela devalued the Bolivar, Venezuela’s
currency, and within a few hours residents
of the country flocked to stores to spend any physical cash
they had on hand or in their bank accounts. When a currency
is devalued, either overnight or over a period of months and
years, the purchasing power is destroyed. What you could buy
today for $50 will cost $100 later. We’re not suggesting
you spend all of the cash you have, but take into consideration
some of the things you regularly spend money on daily, monthly
or yearly. Can you purchase those items now and save them for
later use? If so, wouldn’t you rather pay 10% or 20% or
even 40% less now than three years from now?
It is important
to be prudent with where one might invest their money, as it is
impossible to say for certain that an inflationary environment is
in our future, and which goods will be affected by increased prices.
But all signs point to an eventual devaluation, officially or unofficially,
of the US dollar. While the aforementioned "investments"
are not traditionally accepted and your financial adviser might
think you’ve gone off the deep end, they are worth considering
and provide you with another option for protecting your wealth.
Slavo [send him mail] is a
small business owner and independent investor.