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Guilty – inflation is the real killer

HeroicInvesting.comWe briefly touched on this topic earlier but it often takes repeated exposure to wrap your mind completely around the concept. The devaluing dollar in the face of rising inflation can turn your modest retirement portfolio into something special if you do it right. If you don’t, it’s Ramen noodles and vacations in the back yard.

First, a basic definition. A devaluing dollar means that a dollar 10 years from now will buy less than a dollar in your pocket today. The reason is that our currency is no longer backed by a portion of gold sitting in a vault somewhere to give it intrinsic value. A dollar wouldn’t buy anything at all if it wasn’t backed by the “full faith and credit of the United States government.” Trouble is faith in good old uncle Sam’s credit is kind of on shaky ground right now. Plus he’s printing out money by the bushel to pay for the boondoggle succession of bailouts.

More money in circulation means each dollar is worth less – law of supply and demand. Print enough of them out and they become worthless; Google “Zimbabwe” or “Argentina” and read about the fiscal mess they created through poor government foresight.

The cold, hard truth is you can’t spend your way out of a recession. It’s been tried in the past and we can’t find a single example where it worked. So why is the Obama administration following the folly?


Ask him. The reality is inflation is here to stay and set to start rising in a big way. Your retirement pension will undergo a massive devaluing, along with the dollar, unless you learn how to invest in a manner that takes advantage of inflation. Here’s a clue – it’s not the stock market. Here’s another clue – it is income property investing.

The Heroic Investing Team

Flickr / jurvetson


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