Inflation Is Here – How To Protect Yourself

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Inflation Is Here – How To Protect Yourself

What I’ve been warning about on my blogs for many years now is finally coming to pass—the Western world, and specifically the United States, is in a state of inflation where people actually notice. This means a lot of you are going to be in very big trouble unless you take precautions against this. 

It’s not like the United States (and the rest of the Western world) hasn’t been in a state of inflation before. It has, for many years. The reason a lot of you didn’t “feel it” is that you were going off the government’s numbers, such as the CPI, which is the official inflation figure the U.S. government uses. Conveniently, what they do with that number is this: They take out everything you would normally use, which means it doesn’t include things like housing, education, and health care, which keeps the number artificially low.

At this point, we see items like lumber and commodities such as food are absolutely skyrocketing in price. This is due to the trillions upon trillions of dollars that Donald Trump, Barack Obama, and George W. Bush have been printing over the last 20 years or so. We’re now in a state of inflation where people are starting to notice it.

Could this become hyperinflation? It’s very hard to predict the future on that. But it is certainly inflation, and as I’ve said previously, the Western world is in a slow state of collapse; this shit is going to get much worse before it gets any better.

Today I’m going to give you five things you can do right now to make sure this inflation bothers you the least—and I’m saving the best for last, so keep reading. 

Most of my investments are things that I know would do well in inflation, which is why I’ve more than doubled my entire investment portfolio in terms of value. Because I’ve invested in things that do well when the rest of the Western world does poorly.

Just to be clear: I am not a financial planner or financial advisor. That’s not what I do here. Please don’t consider this financial advice. Consult with a qualified financial professional before making any major changes in your financial life.

  1. Always hedge your cash with gold.

I’ve mentioned this on my blogs. When you have any cash that’s saved—meaning you plan on keeping it for more than a year or so—you have to make sure that 30 to 50 percent of that total cash is in the form of gold coins you actually own. I’m not talking about gold ETFs; that’s a whole other topic. 

They don’t have to be physically located in your home, but you must own them, and they must amount to 30 to 50 percent of your cash. This way, you ensure your cash. When inflation goes crazy, gold generally does well.

“But Caleb! Gold went down recently!”

Yes, as I explained last year, when you have a sudden downturn in the market, gold will follow that sudden downturn because people panic and sell, which is stupid. But if you wait, gold always goes back up. It happened last year, and it happened in the early 2000s when I was investing heavily in gold—when the initial shock hit, gold fell, but it skyrocketed back almost immediately. You always want a strong percentage of your cash reserves in the form of gold coins you own.

If you guys are interested, I will do another article on how to buy and store gold. It’s a key topic and something I know a little bit about, but it’s beyond the scope of what we’re talking about today.

  1. Have some amount of money in cryptocurrency.

Yes, cryptocurrency is indeed a helpful hedge against inflation. It’s not a literal hedge like gold; Bitcoin is more of a speculation than gold is, so it doesn’t quite work that way. But when currency has trouble and inflates, a lot of Libertarian-ish guys like me like to buy a lot of cryptocurrency, which brings the value of crypto up.

Some of you have made a lot of money in crypto. Some in my audience are now millionaires because they did very well with cryptos; I’m glad you took my advice and did well. But having some money in crypto is a good idea.

  1. Buy your consumable items in bulk.

This means when you go to the grocery store and get things that are consumable but non-perishable, buy them all at once. Buy them once a year if you can. I buy mine about twice a year or so.

Twice a year, I’ll go to Costco and buy a giant mound of things—seven or eight tubes of toothpaste, giant gallon-sized jugs of shampoo, and so on—all in bulk, all at one time. Because if we come into a state of inflation, the prices of those things will go nowhere but up. That means that the cheapest things will be is right now.

One of the reasons my wife and I were totally cool last year when the pandemic hit is because I had two months’ worth of toilet paper stockpiled already. That was in addition to another 45 days of paper towels and things like that. We never ran out of anything last year because we buy everything in bulk. That’s a smart thing to do in an inflationary economy like the one we’re in now.

  1. Real estate

You can do well in real estate, even in an inflationary market, if you’re careful and do it right. You can even get creative with debt and whatnot, but that’s beyond the scope of our discussion today. Real estate can be a good move during an inflationary market, but you’ve got to be careful and mindful of the specifics. I can’t train you fully in one article, but real estate is one of the five things you can do in a volatile market.

Real estate is a critical component of your long-term financial investment portfolio. Make sure you have good advisors and make sure you’re talking to the right people.

  1. Foreign currencies

This is something no one really talks about outside of this niche.

If you do the research and you’re careful, you can save yourself a lot of pain and suffering if you diversify your cash into multiple currencies from multiple countries. That doesn’t mean you take your collapsing American dollars that will be worthless someday and trade them for some other collapsing currency like Euros. Don’t just go buy British pounds or Euros. Instead, do the research. There are lots of countries that are doing just fine right now and aren’t printing up insane amounts of cash that devalue it on the market. Many countries have strong banks that have never failed in all their histories.

You don’t want all your currency in just one denomination. That’s insane in the modern era. You need to diversify. So combine that with the first item on this list: Hedge your cash with gold, then diversify some of your remaining cash with currency from other countries. It’s silly to not do this if you’ve got significant cash laying around.

Obviously, you can take that to the next level and move out of the collapsing Western world, like I did, but I realize that’s a tall order for a lot of you.

This article was originally published on June 10, 2021