Published April 17, 2011 in the Dallas Morning News
By: Ed Butowsky
We are about to enter what I believe will one of the worst inflationary periods of the last 30 years.
And don’t take comfort in the current low inflation numbers. The Consumer Price Index is an unreliable measure of the cost of living in the United States. It is misstated by 6 percent to 7 percent per year.
The first contributing factor to higher inflation is the amount of money that is being printed by governments around the world, including the United States. This alone is creating an inflationary problem, but it doesn’t stop there. Another factor is the demand inflation for goods and services coming mostly from Brazil, Russia, India, and China.
The combination of these two factors along with a weak economy will make investing over the next 10 years challenging. We are likely to be entering an economic condition called stagflation – high inflation, high unemployment, coupled with a weak economy.
One investment i’d suggest during a period of stagflation is Market Vectors Agribusiness, and agricultural products exchange traded fund. It should move higher as agricultural product prices rise.
A word about Ed Butowsky:
Ed Butowsky is the managing partner of Chapwood Investment Management and is an internationally recognized expert in the investment wealth management industry. Ed is also a frequent guest on other networks such as CNN, NBC, ABC, Fox News, Fox Business, and Bloomberg to name a few.
Check out some of our other articles:
- What’s happening in the world of finance?
- How to inflation proof your portfolio
- Why are financial advisors running scared?