Inflation Hedges?
I read one of your articles about financial markets being rigged. You suggested that Christians invest in inflation hedges. But, houses are going down and losing value. So what else can we do?
Answer:
IMF plans to devalue the dollar
Good question! For our readers, we pointed out a German article which reveals the IMF (Intl. Monetary Fund) intends to devalue the dollar against other currencies to help reduce America’s current account deficit. This will cause prices to go up for almost everything in the U.S. So much for “free” markets.
But, note that we are currently in a mild deflationary environment. So the kind of devaluation or inflation the IMF is suggesting is not occurring at the present.
Hyperinflation
Eventually, we know we will likely evolve into a hyperinflationary period suggested by Revelation 6:6: “A quart of wheat for a denarius, and three quarts of barley for a denarius, and do not damage the oil and the wine” (ESV).
A denarius was equal to a day’s pay. So this prophecy foretells that a worker will barely have enough to eat let alone pay for his family’s needs, shelter, medical care, college tuition, or cable TV.
Only One Thing Counts
Before making suggestions, however, remember that in the end only your relationship with God counts – not your money. To illustrate this, how long do you think people will remember you after you die? Maybe your children will think of you from time to time…perhaps your grandkids…but that’s about it. In contrast, God remembers you forever and cares enough about you to write your name in his Book of Life (which could be your DNA records, by the way).
…”if anyone’s name was not found written in the book of life, he was thrown into the lake of fire” (Revelation 20:15).
Make sure you are a believer in the things listed in 1 Corinthians 15:1-4. Then what you do counts for eternity – not just for your 70 or 80 year lifespan.
Quick List of Things to Do:
Meanwhile, here is a quick list of things you might want to do. First, get out of debt! Although rates run between 14% to around 32% today, variable rates on credit cards could climb as high as 600% or more – they have in other countries during hyperinflation.
Purchase dry and canned goods when they are on sale at Wal-Mart, Costco, or other discount stores. Buy what you would normally eat such as dry soup mixes, powdered milk, and canned fruits.
Invest in an old-fashioned hobby: gardening. Plant veggies you enjoy and that will grow in your climate.
Purchase wood in advance for a wood stove.
Purchase a few silver and gold coins rather than invest everything in mutual funds. Purchase American Eagle collection “books” for children or grandchildren and add to them on Christmas or birthdays.
Invest a portion in selected foreign currencies which will go up as the dollar loses value. There are foreign bond funds available through most brokers, closed-end funds traded on the NYSE, and currency CDs available through EverBank’s World Markets.
Don’t forget to tithe. “Bring all the tithes into the storehouse, that there may be food in My house. And try Me now in this, says the Lord of hosts, if I will not open for you the windows of heaven and pour out for you such blessing that there will not be room enough to receive it” (Malachi 3:10, NKJV).
You might think we would suggest I Bonds (Inflation Bonds) or TIPS (Treasury Inflation Protected Securities). We purchased some for ourselves. However, they have been a disappointment. The way COLA (Cost of Living Adjustments) is calculated it tends to leave out things like food and energy. So they are not adequate inflation hedges at all. Our government states that inflation is around 2%. However, real life has inflation running about 10% plus. (Note the hikes in healthcare premiums, college tuition, gasoline prices, and foods, for example).
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References:
Brusse, Warren. 2005. The second great depression: starting 2007/ending 2020. Booklocker.com, Inc. ISBN 1-59113-688-1.
Gotthardt, Alan. 2003. The eternity portfolio. Wheaton, ILL: Tyndale.
McCurdy, Diane. 2005. How much is enough? Balancing today’s needs with tomorrow’s retirement goals. Hoboken, NJ: Wiley & Sons.
Wiedemer, Spitzer, & Janszen. America’s bubble economy: using alternative investments to protect your portfolio. Hoboken, NJ: Wiley & Sons.
Wilkerson, David. 1998. God’s plan in the coming depression. Lindale, TX: Wilkerson Trust.
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“And it is this Good News that saves you if you firmly believe it…that Christ died for our sins, just as the Scriptures said. He was buried, and He was raised from the dead on the third day as the Scriptures said” (1 Cor.15:1-4, NLT).
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