To hedge against inflation means to buy an asset that will either store its value or go up in value while your paper currency is going down. Assets could include land, oil, gold, silver, commodities, real estate, etc.
Not all tangible assets will go up during a period of inflation. For instance, the housing situation that is brewing in our country has sent prices of homes plummeting. While our dollars are being devalued, the price of people's largest assets (homes) is going down as well.
12 OUNCES EQUALS
Investing is cyclical in nature, and there are historically times in our economy when financial assets were better investments to be in than tangible assets. For example, stocks, bonds, mutual funds, IRA's, etc. When an oversupply of money gets pumped into an asset like the stock market, it becomes a bubble, which means it is overbought.
All financial bubbles that occur eventually burst. Having the foresight to know when to get out is what very few people really possess. It's easy to see that right now, the stock market is in an incredible bubble, and many economists are expecting a steep correction downward.
The government bailout funds have kept the market afloat over the past year, but that is only a band aid covering the real problem. Eventually real debts must be paid. Eventually people will be able to see that the government is struggling to stay afloat.
We are in the middle of a massive amount of inflation right now, and if you are not completely familiar with what inflation is then let me explain in layman's terms. Inflation means to print excessive amounts of money. It means to increase the money supply, and without an equal increase in goods and services, the prices of those goods and services go up.
Where should your money be? Well, I'm not a financial advisor, but experts like Jim Rogers, Bob Chapman, Ted Butler, Peter Schiff, and others are saying to buy gold and silver. Gold and silver are the oldest forms of money and are still sought after during times of inflation.
Each one of those experts listed above are specifically bullish on silver. Why? It's because silver is at all time low reserves. 95% of all silver above ground has been consumed by industrial applications, not to mention there is 5 times more gold than silver above ground.
Silver is the ultimate hedge against inflation because silver is money and it's used for industrial applications. Silver has been money for thousands of years. It also keeps our cell phones, refrigerators, solar panels, and countless other electronics going.
The silver price is about /ounce today, but experts agree that the price will go well north of 0/ounce in the next 3-5 years.
If there was one piece of advice I could give investors looking to trade their paper dollars for real money, it would be to buy silver. If you are not interested in buying at this point, do yourself a favor and research the silver and gold market a little closer.
How to Hedge Against Inflation 12 OUNCES EQUALS
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