Big Inflation Coming

Adam Hamilton

Americans voted and the winner is inflation. Under Obama, expect four more years of record deficits and record national debt growth. Obama's Administration spent roughly 50% more than the government took in, which can essentially only be financed in two ways: Borrowing from foreigners and/or running the printing presses.

The latter is pure inflation, which damages the people with the least the most. For the 50% of Americans that work hard enough to owe income tax, inflation’s price is generally manageable. For those on fixed incomes, inflation is devastating.

Inflation is widely misunderstood, which serves politicians well. It is a nefarious and regressive stealth tax that slowly strangles and starves the poor. Those who can afford it put their capital in tangible assets like gold, silver and real estate, which preserve purchasing power.

The US election showed that 50% of Americans decided the economy didn’t matter. Obama's victory validated his failed policies. America rewarded him for his disastrous economic mismanagement, guaranteeing more of the same. And the Fed will continue creating new money out of thin air to partially finance this excessive government spending.

While Obama's poor supporters starve as inflation prices food and shelter out of reach for them, others have a fantastic refuge: Gold and silver. During Obama's first term the gold price doubled, while silver nearly tripled. And since it takes money supply growth time to work its way through the system and bid up prices, much of the last four years' inflation is still coming.

If you aren't already invested in gold and silver, don't delay. This imperative is even more urgent since Obama's win will almost certainly bludgeon the general stock markets into a new cyclical bear market now due anyway.

The best refuge for prudent investors is precious metals. They are poised for a massive inflation rally.

source: safehaven