Yesterday I got a call from a "client" who said he had been doing some "hard thinking". He is concerned that in about two years we're going to see "hyper-inflation", and he wants to talk about how we are going to invest for that outcome.
1. At the moment, a little inflation would be good. We are now experiencing DEFLATION. That's why the value of your assets is going down.
2. In the late 1970's we had a problem with inflation, we thought it would turn into a "hyper-inflation". It didn't.
3. The then Chairman of the Federal Reserve Board was Paul Volker, he dealt with the inflation problem in a very direct way. He raised interest rates to the highest levels most of us had ever seen. It worked!
4. Paul Volker is on the Obama economic team. The Fed can and will remove funds from the system as fast as they injected them. Volker is not so old that he forgot how to deal with inflation.
5. Hyper-inflation seems to be a favorite topic of the "Fear Media" and particularly "Talk Radio".
Most of the commentators have little or no direct experience investing their own money, much less other people's and they could care less what happens to your money. They SELL SOAP!
6. Find something constructive to do with your time and quite worrying about "problems" that don't exist.