Dollar Pimp

Gold as an Inflation Hedge

I wonder if I'm missing something re: TIPs and REITs as inflation hedges.

TIPs: If interest rates soar like I expect them to, isn't it possible all my CPI linked capital gains could get wiped out? What if the value of the dollar declines by 50%?? Relying on the govt to accurately report inflation numbers and protect my investment seems like an awful big leap faith to me. If the bond market tanks, TIPs are going to get crushed right along with plain vanilla treasuries.

REITs: The logic goes that rents increase in inflationary times, but does this hold true in a collapse led by a real estate meltdown?! Rents are going down, not up, and will likely continue to head lower until supply and demand come back into balance. Unfortunately for the REIT investor, this could be long after inflation becomes a real problem.

Personally, I see all the inflationary capital flows eventually heading into emerging markets and commodities. I view dividend-paying foreign equities, especially in the natural resources space, as the most desirable place to be. Maybe I've been listening to Peter Schiff too long, but I still think he's got it right. Just a little early.

As Good as Gold?

Not to mention the fact that TIPS come with the risk of default by the US government. It's time to think the unthinkable.


On Dec 23 09:09 AM 20smoney wrote:

> TIPS are calculated by the government's flawed inflation model, therefore
> they can keep their inflation figures lower than real inflation.
> TIPS will not provide you with a real hedge if and when the dollar
> collapses. Only gold can do that.

Historic Financial Collapse Underway?

Sensetti, you need to turn off Fox News and listen to the first hand accounts of US military personnel from Iraq Veterans Against the War -

ivaw.org/wintersoldier

Like the economy, even our "mighty military" has a breaking point.