Three Alternative Sources for the Current Inflation Rate
Inflation can be a nasty surprise for investors who are not amply prepared. Its effects can reduce your real return on an annual basis and make it much more difficult to keep up with your standard of living. With the newly-announced open-ended quantitative easing program that involves a fair amount of money printing, many investors are worried that it is only a matter of time before inflation kicks up and wreaks havoc on their investments. Some are predicting hyperinflation, while others like Bill Gross have stated that inflation will be significant enough to turn all real returns to 0% for the foreseeable future [for more inflation news and analysis subscribe to our free newsletter].
Why Bill Gross Thinks The Fed is Ruining The Economy
It seems like everyone has an opinion on quantitative easing these days, as the actions of the Fed and Ben Bernanke have riled up investors all around the world. Last Friday, some were waiting for Bernanke to announce QE 3 at his Jackson Hole speech, though he merely hinted that the Fed will step in if the economy worsens. Given all of the money printing and the fact that the U.S. economy is still sluggish at best, many experts are weighing in on the various asset-purchasing programs and whether or not they agree with the actions of the Fed [for more economic news and analysis subscribe to our free newsletter].
Norway Prepares For The End of The World
The concept of a world-ending economic collapse seemed to be a joke several years ago, but as time has pressed on, more and more people have hopped on the bandwagon of a world-ending crisis, be it a natural disaster or economic crisis. But while some people may be sitting around merely talking about the possibilities of all of the terrible things that could happen, one country is actually doing something about it. The Norwegian government has funded and built a seed vault in preparation for any kind of regional or global disaster [see also Doomsday Special: 7 Hard Asset Investments You Can Hold in Your Hand].
Bill Gross: Inflation Coming Soon to a Developed Country Near You
In a recent, rather grim article, bond king Bill Gross stated that investors can expect inflation to cut significantly into their returns in the coming years. In fact, he went as far to say that he believes the average return on a nominal basis will fall around 0%. His argument looks at a long history of both stocks and bonds and compares the past to the present to arrive at his final figure [see also Warning: Ignore Bill Gross’ Hard Money Prediction At Your Own Risk].
Five Surprising Facts About Hyperinflation
Inflation is a common environment for most economies as prices tend to rise as time passes. Governments and central banks around the world mold policies in an effort to curtail inflation and keep it under control. Another less common phenomenon is deflation, or the general decline in prices (and wages) and inflation rates fall below zero. Still an even more rare event is hyperinflation, an issue that does not ail nations often, but when it does, it leaves behind significant damage. For those unfamiliar with hyperinflation and its impact on a surrounding economy, we outline five surprising facts about the phenomenon [see also Doomsday Special: 7 Hard Asset Investments You Can Hold in Your Hand].
Beyond TIP: Five Inflation-Protected ETFs Worth a Look
We’ve all heard of TIP, right? If you’re a long term commodities investor that buys on the dips, you might use this highly liquid ETF as the short term place for your dry powder. In theory, it protects from inflation, since the ETF holds only Treasury Inflation-Protected Securities (TIPS). In practice, the return on these TIPS is based on the movement of the CPI over time. Is this a problem? Depends whom you ask.
