Dealing with Inflation

by Dual Income No Kids on June 30, 2009 · 0 comments

Hi All,

So I was sitting on the metro riding home today and was leaving through somebodys leftover USA Today. The finance section had a piece on inflation. The article basically said that because the Feds are racking up huge bills, the government will have a powerful incentive to create inflation.

The thing about it was, that they cited this swiss economist, Marc Faber. Faber is famous for having made the prediction that hyperinflation was a 100% certainty for the US. The thing is, the newspaper was the USA today. I always kinda figured that Faber was only quoted by internet freaks and hard core gold bugs. I was surprised that a reputable paper like the USA Today quoted the guy.

So it seems that the mainstream press, not just bloggers are starting to take the inflation issue seriously.

So, I don’t know what you’re planning on doing about this, but I’ll tell you this much. When and if inflation gets to around 10 to 12% I’m planning on loading up on long term debt instruments. Preferably something like 30 year t bills or an investment along those lines.

The truth is that high levels of inflation are a historically anomaly. For most of the last 70 years interest rates have been way lower than 10%. In fact, a really high interest rate would be a great opportunity, especially if one thinks about it as an opportunity to lock in a high return with low risk. It’s a signficant money making opportunity and one that could greatly enhance our wealth. So, what will be on the menu will be things like 5 year CDs and long term treasury obligations.



Like DINKS? Subscribe!

Screen shot 2017 04 25 at 1.36.57 pm

Subscribe to get the latest DINKS Finance content by email.

Powered by ConvertKit

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: