THE FINANCIAL WARNING YOU WERE NEVER SUPPOSED TO HEAR 17
increases the real value of debt and forces many companies
and ultimately the banks themselves into bankruptcy.
On the other hand, the Fed may try so hard to fight the
deflation that they end up causing inflation that destroys the
real value of your savings, insurance, annuities, retirement
checks and any other form of fixed income. So far, the Fed has
managed to walk a fine line between deflation and inflation,
but the situation is highly unstable and is likely to tip one way
or the other quickly and soon.
The depression in the U.S. will continue indefinitely until
structural changes are made. The 25-year depression in Japan
that began in 1990 is a perfect example of this. The U.S. is now
like Japan, and the rest of the world is heading in the same
direction. Investors like you are in constant danger; both defla-
tion and inflation are real threats.
The good news is that structural changes do not happen
overnight. They require action by the White House and Congress
and such action is the product of debate and compromise that
we can see coming.
If no action is on the horizon, the depression will continue
and you can seek shelter from inflation and deflation.
A balanced portfolio of cash, gold, land, fine art, govern-
ment bonds, alternative investments and stocks in the energy,
transportation, agriculture and natural resource sectors should
do the job. If, however, action is on the horizon, investors can
prepare for the expected boom by positioning in technology,
venture capital, financials and other pro-growth cyclical sectors.
You cannot know which outcome will prevail. But with the
right understanding of these depression dynamics and watching
your monthly Strategic Intelligence issues and updates closely you
can know the signs of change and see what’s coming. In fact, as
a Strategic Intelligence reader you’ll be among the first to know.