General Stock Ideas

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>>> Protecting Yourself From Worldwide Inflation




By James Rickards

September 23, 2016



http://dailyreckoning.com/protecting-yourself-from-worldwide-inflation/




Protecting Yourself From Worldwide Inflation

No one has to be a victim of the global elite plan. You just have to see it coming. You preserve wealth by getting out of the way of certain developments. You increase wealth by getting out in front of other developments.

As always, timing is critical. It’s important to stay focused and be nimble.

Many of the short-run trends are the exact opposite of the long-run forces.

Stocks may perform well in the short run as central banks maintain their easy money stance. Once inflation takes off, that tends to be a disastrous environment for stocks because inflation hurts capital formation and new investment.

Cash is another good short-term asset because it fights deflation, reduces volatility, and gives you optionality to pivot into other asset classes when the timing of the elite plan becomes more clear. Yet cash will be a bad long-term choice because it suffers the most in inflation. In extreme cases, cash can become worthless.

Bonds are just a more volatile form of cash, with a higher yield. Again, bonds are a good short-term play (because of deflation fears) and a bad long-term bet (because inflation is just a matter of time).

Some of the best opportunities will be in private equity and technology startups. These have to be carefully selected because the failure rate in startups is high.

But good ideas can prosper in any environment. We’ve seen how Google, Amazon and Apple came through the tech crash of 2000 and the financial crisis of 2008, just fine. Finding these companies is easier said than done, but they’re out there. My favorite sector at the moment is water infrastructure and water technology.


Gold is the ultimate all-weather play. As shown in this article, gold does well in inflation and in deflation (because government itself will bid up the price).

The problem with gold is that it just may not be available when you want it the most. This could be due to simple supply and demand, or governments may try to regulate sales or buy the floating supply for their own reserve positions.

The time to get your physical gold is now.

Regards,

Jim Rickards
for The Daily Reckoning

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