Shifting to Tangibles in an Age of Inflation

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I'm often asked by my consulting clients why I put so much emphasis investing in tangibles rather than in traditional investments that are denominated in United States dollars. The problem with dollar-denominated investments is that they are vulnerable to inflation of the currency unit itself. The U.S. governments over-spending and deep indebtedness is bound to catch up with it someday. And when it does, inflation and economic ruin will be the result.

But there is protection from inflation. If the majority of you assets are in tangibles and they are in your immediate possession, then you will be insulated from the searing heat of mass inflation. And, in the event a total collapse of the dollar, many tangibles can be used in lieu of cash, for barter transactions.

Which tangibles? I recommend buying farm land, common caliber ammunition, guns, hand tools, good quality knives, silver bullion coins, and gold bullion coins.

To spell this out in greater detail, I recommend:

  • Productive farm land that is in a lightly-populated region with plentiful water and rich topsoil.
  • Factory made ammunition in common calibers ("ballistic wampum") such as: 308, .30-06, .30-30, .223, .7.62x39, 12 Gauge, .22 Long Rifle (rimfire) .45 ACP, .40 S&W, and 9mm Parabellum (Luger). For your investment and barter stockpile, buy only name brands like Winchester, Remington, and Federal--and perhaps Hornady and CCI.
  • High quality guns from name makers, chambered in common calibers. Good choices include M4geries, AR-15s, Steyr AUG-A3s, HK91 clones, HK93 clones, Galil Golanis, Ruger Mini-14s, FN-FAL clones, M1As, .308 Winchester bolt actions, Glock double column magazine pistols, XD pistols, Colt and Kimber M1911 .45 pistols, and Saiga 12 gauge shotguns.
  • Well-made hand tools, with an emphasis on 19th Century technology tools, such as: shingle froes, scythes, adzes, draw knives, axes, crosscut saws, and so forth. BTW, many other old-fashioned tools are available from Lehman's.
  • Well-made knives, such as: Swiss Army knives (of various models), CRKT knives, and Cold Steel knives.
  • Silver bullion coins should probably be 1 ounce or less. Either buy 1-ounce bullion "rounds" from a name brand supplier like Northwest Territorial Mint or Tulving, or pre-1965 circulated US. silver quarters from a company like AMPEX.
  • Buy gold bullion coins only after you have secured at least 500 ounces of silver bullion coins. (Always prepare for a "disaster barter" situation first, and then move on to buying gold coins as a long term investment and inflation hedge.) In the U.S., I recommend buying only the most readily-recognizable gold bullion coins: American Eagles, Canadian Maple Leafs and Krugerrands.

It is difficult to predict when substantial inflation will emerge in the United States. There are too many variables that cannot be predicted. Some of them are essentially political, such as debt monetization, currency pegs, bailout programs, and changes in tax laws. Just be watchful for signs of resumed inflation, and be ready to act swiftly to get the balance of your investments out of dollars.

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About this Entry

This page contains a single entry by Jim Rawles published on September 20, 2010 8:28 PM.

Letter Re: Australia's New Nanny State Knife Ban was the previous entry in this blog.

Seeking Subject Matter Experts for the Second Patriots Sequel is the next entry in this blog.

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