Gold and Inflation:

As a Financial Consultant with more than 20+ years experience I can tell you that inflation is a double edged sword. First, let's look at the pros:

If I buy a house for $200,000 and inflation is 10%, it makes my mortgage of $200,000 feel like $100,000 in less than 7.2 years. Thus debtors benefit as long as they have a fixed rate of interest that is less than the rate of inflation...(Please see my calculators at http://www.drocktonmortgage1.com). The same thing holds true for other debt on a fixed rate.

Inflation adversely effects the stock and bond market but will positively influence the foreign currency market and lead to dramatic gains in gold and silver (click here to learn more).

In fact, gold has averaged close to 30% return over the past 7 years and is great for IRA rollovers! When one horse is dying another is finding new life.

Money can also be made in the futures market in any commodity (gold, gold options, gold futures, oil, gas, wheat etc.,) during an inflationary cycle.

Now for the down-side:

Inflation will kill your 401K, State Retirement Plan, bonds, savings bonds and any other cash investments because it forces interest rates to go higher. New bonds are in competition with the existing ones that pay a lower rate of interest in your portfolio. Thus, higher paying bonds cause yours to loose value. Again, you are better off with gold bullion or gold bullion coins.

Wages rarely keep up with inflation and most people are not sophisticated enough financially to reap the benefits. Thus, 99% will be on the losing end. Among these are Farmers that are selling into the futures markets at a guaranteed price, builders that sell at a fixed price or anyone else that cannot provide immediate delivery of a product or service. On the other hand gold options and gold futures are a great hedge against inflation no matter what you produce.

As production costs increase, it cuts into profits and leads to cost-cutting at the expense of the consumer who is very "price sensitive" but not necessarily "quality sensitive". Thus the weakening dollar continues to lose purchasing power. Saving gold makes far more sense than saving dollars.

Inflation is a double edged sword. As long as you know which side will cut you, you can actually benefit from it. Sadly, though, the average individual will never realize those benefits with variable rates on their consumer debt; food and housing expenses; transportation costs; etc...

Gold is the logical hedge against inflation:

Small investors can purchase 1/10 of an ounce gold bullion coins. Every working family in America should be setting aside 10-15% of their income as savings. If everyone did this, it would play a positive role in financially stabilizing the family. With 70% of divorces resulting from financial stress, gold would also help stabilize relationships.

Since divorce has such a huge impact and cost to society at large, it would be in everybody's best interests to promote saving gold. To be effective, savings and investments need to be taught at the high-school level. A Mandatory section on buying gold should also be included.

For those not willing to wait on the politicians, some families have found that setting aside some time, one day a week, can be very beneficial for teachings about gold and other investments. Discussing family finances before they reach crisis levels could play a major role in preserving our families. Planning for crisis through saving gold and gold bullion coins should be an important part of that training.

Retirement plans should include a mandatory precious metals component for those that desire to invest in gold. Not in gold mines or gold resellers, but actual investment in the metal itself.

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