From the Editor: We've been tracking this threat for years, ever since Keith Fitz-Gerald brought it to your attention back in January 2010. Today, Resources Specialist Peter Krauth weighs in on some recent developments in this story, because three of the commodities he covers can protect you. The Fed can't print these things... Here's Peter.
Central banks may have foolish policies, but central bankers are no dummies.
They know exactly what they're doing. They even comprehend a few of the implications, too.
Which is why it's interesting that some American central bankers have suggested doing away with the debt ceiling altogether.
Famed investor Marc Faber recently said, "The question is not tapering. The question is at what point will they increase the asset purchases to say $150 [billion], $200 [billion], a trillion dollars a month."
Faber expects the Fed's current QE4 to become "QE4-ever."
That could mean years of money printing and ultra-low rates.
Even bond king Bill Gross recently chimed in his latest monthly outlook that "The United States (and global economy) may have to get used to financially repressive - and therefore low policy rates - for decades to come."
Either way, don't depend on the Fed to save you. You can save yourself.
And now you'll need to...
The Best Investments to Hold When Interest Rates Rise
Inflation can be tough to contend with, yet investors should guard against inflation lest it eat away at their portfolios - which isn't hard to do if they know the best investments to hold when inflation rates rise.
Official interest rates are notoriously unreliable - outright false at times - which can downplay or underestimate the situation. Don't trust the numbers. Make that mistake, and your investments' value can evaporate before your eyes.
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The Misunderstood Link Between Oil, Natural Gas and Inflation
According to conventional wisdom, there can't be a significant rise in inflation without a corresponding, and usually preceding, jump in energy prices.
In fact, the correlation between energy prices and inflation has become almost a mantra among some market pundits.
Unfortunately, the reality is somewhat different than what's portrayed by talking heads in thirty- second sound bites.
As with most complicated problems, the answer just isn't that simple.
While the energy sector stretches from hydrocarbons, through alternatives, to the renewed interest in solar, wind, geothermal and biofuels, it is the dominant force in the sector that tends to drive the markets.
That means crude oil and natural gas.
Why Veteran Trader Says Inflation in 2013 Is Imminent
Is a spike in the monetary base - currency in circulation plus bank reserves at the Fed - the first sign of imminent inflation?
Art Cashin, the well-respected director of floor operations at the New York Stock Exchange for UBS, recently told King World News the increase in the monetary base may well be a sign of impending inflation.
Monetary base, sometimes called high-powered money, is the basis for the bank lending that drives our economy. When interest rates are normal, banks use their reserves for lending.
Unfortunately, these are not normal times. The U.S. Federal Reserve and other central banks around the world continue to hold interest rates at zero.
Zero interest rates mean zero returns. Investors don't get paid for investing. Banks don't get paid enough interest to compensate for the risk of lending money into the economy. Looking at it another way, there is no penalty for doing nothing with your money.