Inflationary Fire Insurance

Inflation now looks a near-certainty. The only unknown is its timing…THE FLAMING EMBERS of inflation have already landed atop the thatched roof of American finance, writes Eric Fry in the Rude Awakening.

And yet investors can still buy fire insurance on the cheap.

In the next 1,373 words, we’ll examine a few of these “inflation insurance policies” to assess their virtues and drawbacks. Because a powerful new inflationary trend is very likely to occur, and the prudent investor should probably take steps to guard against it.

“But wait a second!” some readers may say. “What if a powerful deflationary trend occurs first?”

Good question. Because it might. But we’d begin preparing for inflation anyway. Its arrival is near-certain. The only real uncertainty is its timing. Imagine an infallible clairvoyant told you that your house would burn down in one of the next five years, would you say to yourself, “Gosh, maybe I should try to figure out which year it will be and not buy fire insurance during the other four years.”

You might actually guess correctly, in which case you would have saved yourself four years worth of insurance premiums. But you might guess incorrectly, in which case you would have lost your house.

Your call.

To this market observer, inflation seems like a near-certainty. Not an absolute certainty, mind, you, just a near-certainty, sometime within the next three years. So why not beat the rush to buy inflation insurance? Why not buy some now?

Read more….