While it is our fervent belief that “inflationary times, they are a comin’ back”, there’s no denying that we are in a period of deflation right now. What does that mean? Prices are a little lower and the dollar is a little stronger. While this market condition might wander along for a couple of years, don’t kid yourself. It’s just the calm before the coming inflationary storm.
Is it time to sing praises to the economic geniuses guiding federal fiscal policy? No. Is it time to put on your happy hat because the Obama policy of hope has finally paid off? Not quite. Now is the time, while the dollar is still showing signs of life, to roll up your sleeves and get to work ditching dollar-based assets like home equity, stocks, savings accounts. There are probably readers out there replacing pacemaker batteries about now. Ditch your savings? Why, for heaven’s sake?
Because when inflation returns all those types of assets will be depreciating at about 10% per year due solely to inflation. For every $1,000 you have stuffed in the sorts of assets mentioned, you’re going to lose $100 in purchasing power each and every year.
How do you avoid this revolting development? Like we said, get out of the bad stuff and into income property investing. Use your money to leverage real estate loans and let the banker be the one to get flattened by inflation. From behind our crystal ball, this is the ONLY way to create wealth in the future.
The Platinum Team
Flickr / Charley Lhasa
