The Fed would love to have us believe that inflation is no longer a danger. They trumpet from the highest microphone in front of a podium the fiction that the slowing United States and global economy raises the danger of deflation, that we no longer need concern ourselves with inflation. In fact, the political economists would love for us to believe “recessions cure inflation.”
Umm, sorry but no!
While we may be in a tiny hiccup-sized pocket of deflation right now, it would not be a good idea to make drastic portfolio changes with the mistaken belief that the status quo will continue. Sorry again, but there is practically no way deflation can stand up to the massive government influx of massive stimulus program cash. Rebate checks and bailouts are going to result in nothing more than a resumption of the steady upward climb in yearly inflation numbers. It won’t be immediate but fast forward five, six, or ten years from now and hold onto your hats unless…
Let’s hope you’ve been paying attention to the strategies suggested by Empowered Investor. The prudent use of leverage to buy income properties is perhaps the only chance you have of radically increasing the value of your portfolio while stock, bond, and mutual fund investors are wondering what hit them.
The juggernaut that’s going to flatten them is inflation. Inflation kills most investments. Paradoxically, inflation actually reduces your loan balances over time when you invest in real estate. That’s why we love it so much. The future is going to be inflationary and unless you adjust your investing method accordingly, you’ll be spinning your wheels, making large brokerage houses wealthy and face the prospect of never reaching financial independence.
There is a way out. Contact on of our expert investment counselors and learn how to make inflation work for you.
Flickr / Howard Dickins
