Thursday, February 28, 2008

Consequences Of Inflation: Nonsense Says Bernanke

Federal Reserve chairman Ben Bernanke has shown once again that he could care less about the consequences of inflation. In his latest address, Bernanke made it pretty clear that at the next Fed meeting (March 18th) he is planning to lower interest rates once again. Did he not get all the reports that were released this month about ramped inflation, or does he just not care?

Every month it seems inflation is getting worse and worse, and the economy despite all the rate cuts, is continuing its downward spiral. Newsflash to Bernanke: The rate cut thing isn’t working. Well, it is certainly working to increase inflation, and devalue the dollar, but it isn’t helping the economy like he hoped. Rather than admit defeat, Bernanke is making what he must think is a valiant stand, but rather than glory all he is likely to see is stagflation and a bunch of ticked-off retired folks.

To all of the retirees out there, I offer you my sincerest apologies. It appears that your retirement money is not going to go as far as you probably planned. You can thank Alan Greenspan, and now Bernanke for that little favor. I wonder how many parents are going to have to move in with their children because they can no longer afford retirement? It would be an interesting irony considering how children are now moving out later and later in life. To all of the entrepreneurs out there, can I suggest starting a business catering to in-law additions or design? Just an idea I thought I’d share to help fill a need in this soon to be emerging market, compliments of Mr. Bernanke of course.

If you have yet to retire, hopefully you have enough time to conquer this inflation problem within your retirement portfolio. My suggestions are to diversify out of the dollar and make sure that you have exposure to gold and silver. Gold makes me nervous right now, seeing how high its price has gone, but at this point I would feel much better owning gold than dollars. Whatever you choose to invest in, make sure that you are taking inflation into account in your retirement need projections, and you had better be expecting more than 2 or 3 percent.

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