Zimbabwe, Here We Come!
Normally I find Alan Abelson's opinion pieces at the front of Barron's a little to pessimistic and acidic for my taste, but I almost spit out my coffee laughing when I read his article in this week's issue. Perhaps I'm getting more jaded as the years go on. Here are a few funny quotes from it:
"Records, the rusty old saw goes, are made to be broken so, incorrigibly jingoistic as always, and fully aware it still has a way to go, we have every confidence that the U.S.A. can ultimately break Zimbabwe's record, set only this year, an annual inflation rate of 100,580%."
"If a rapidly undeveloping country like Zimbabwe can lift its rate nearly 35,000 percentage points in a single month, our vaunted American know-how with a little concentrated effort can surely top that"
I think that Abelson makes a very good point. Inflation is running wild in our country right now. I believe that it is even hotter than the often questionable government statistics indicate. And there's a good chance that we ain't seen nothin' yet as the phrase goes. The government will pull out all the stops to pull us out of this slowdown in an election year, continuing to cut interest rates and spend money that we don't have in stimulus packages (that we'll probably end up paying for anyhow, tenfold down the road). You know what, I don't mind as long as I play the inflation card in my investments, betting that the dollar will go down and commodities like oil will go up. Even if you don't necessarily believe that this will happen, it makes sense to protect yourself will a little exposure to commodities and foreign currencies just in case so you aren't eaten alive if inflation does go out of control.
Here's a link to the article. It's worth a read (subscription required):
P.S. I'm about done with another company write-up. I'm just waiting for the 10 day quiet period to run out before I share it. Stay tuned...