February 17, 2011
Panama City, Panama
Recent headlines below:
“World Bank: Global food prices are rising to dangerous levels”
“Sysco declares force majeure, raises grocery prices”
“The J. M. Smucker Company Announces Coffee Price Increases”
“Kraft warns on price increases”
“Kellogg says it will raise prices”
“Sara Lee to raise prices again on higher commodity costs”
“Bridgestone To Raise Prices”
“Goodyear will raise tire prices up to 6%”
“Allstate rates rise; patience with execs runs thin”
“State Farm wants 28 percent rate increase in Fla.”
“Blue Shield to delay Calif. health rate hikes [for only 60 days]”
“Wellmark [Midwest division of Blue Cross] Rate Hike Approved”
“Abercrombie & Fitch CEO says retailer will have to raise prices”
“Sprint bumps up its smart-phone data plans $10 a month”
“Xcel Energy customers to see rate hikes”
And then there’s this quote to tie it all together:
“Overall inflation is still quite low and longer-term inflation expectations have remained stable.” — Ben Bernanke, February 9, 2011
If it wasn’t perfectly clear before, it should be now. This man is either completely out of touch, or he’s a conniving liar. In either case, you should not allow him to be responsible for your well being.
Don’t let the rising stock market fool you into thinking that everything is back on track. It’s impossible to read these headlines and not see at least half of the things that you use frequently– food, coffee, electricity, mobile phone, insurance…
Here’s the bottom line– failing to properly protect your savings, seek alternate sources of income, and diversify your sovereign risk gets you a free one-way ticket on the economic Hindenburg.
Inflation begets economic trouble. Economic trouble begets social unrest. Social unrest begets political instability… and as we saw in Egypt, political instability (and social unrest) begets a police state.
If you don’t want to be around for it, I’d suggest taking action immediately. The quick start guide is this:
1) Open a foreign bank account. Even if you don’t fund it yet, at least have the means to shovel your money overseas in a hurry.
2) Park at least a portion of your savings in stable, inflation-proof assets, preferably overseas.
3) Look for alternate sources of income– don’t rely on the traditional job market or wait for the government and central bank to create jobs… everyone is good at something, most likely a lot of things. Think about how you can add value, how you can solve problems.
If you’re looking for ideas, particularly for an Internet-based business, one site that I strongly recommend you check out is InternetIndependence.com, run by my close friend and entrepreneurial guru Craig Ballantyne.
4) Look at your own personal vulnerabilities. What would happen if you lost your job? If food became extremely expensive? If gas prices made normal commuting and errands cost prohibitive? If your healthcare became unaffordable? Consider lifestyle changes to reduce these vulnerabilities.
5) Begin researching, in earnest, places overseas where you can go and can live comfortably with the right opportunities you’re looking for. Frequently, the lifestyle changes you need to make can be easily found overseas.
Look, if the skies open and some white knight comes riding in to save the day and stave off any major crisis, you won’t be any worse off for increasing your self-reliance and making preparations. You have nothing to lose and everything to gain by being cautious.
More than likely, though, the miraculous white knight will never come, and just a few years from now, people will be wondering, ‘how the hell did we ever reach this point?’
I think at that point, a few years from now, people will look back today and wonder why they didn’t see the warning signs… in the future, when hindsight is 20/20, it will seem to have been so obvious today.
Stop listening to national leadership and start listening to your instincts. They’re telling you that something’s wrong, and the clear, obvious facts confirm those suspicions. The only people who don’t get it are the ones pulling the strings.
