234 THE BiG DROP
inflation. Reinvesting dividends would increase the number of
SCHD shares you own over time, growing the strength of your
hyperinflation insurance.
Your specific circumstances and risk tolerance will deter-
mine how much you allocate to this idea. As always, Jim rec-
ommends maintaining a diversified portfolio, including cash
and Treasury bonds. Cash and Treasuries are hedges against
deflation. Deflation may be more likely in the near term. But
history shows that hyperinflation is a long-term risk for any
paper money system.■ Recommended Reading
In addition to actionable investment opportunities, there are
several books I recommend to my readers. Each will help in-
vestors understand our complex financial system...■ Money and Tough Love
The Washington, D.C., area is thick with secret agencies with
“three-letter names” such as CIA, FBI, NSA and less well-
known outfits such as the Defense Intelligence Agency (DIA)
and the Director of National Intelligence (DNI).
One of the most powerful, and also most secretive, of these
agencies is an institution that is not even part of the U.S. gov-
ernment. It’s an autonomous part of an emerging scheme of
global governance accountable only to a small elite of central
bankers, finance ministers and heads of state. That institution
is the International Monetary Fund, or the IMF.
Everything about the IMF is designed to deceive you — be-
ginning with the name. The IMF is not really a “fund” in the
sense of an endowment or mutual fund; it functions as the cen-
tral bank of the world taking deposits, called “borrowings,” from
countries around the world and making loans to its members.