Register for The Seven Pillars of Financial Well-Being Workshop

Discover the Real You

Our proprietary discovery process helps you identify what is important about money to you and reveals your core life values. Only then are you able to make the most balanced financial and life style choices that will enrich your life.

View more..

Create Solutions with Guaranteed Results

We only work with the highest rated insurance companies; many of whom have centuries of experience and longevity. Our specialty is in creating financial plans that leverage the power of safe money instruments.

View more..

Focus on Your Financial Core

Too many advisors focus on investing and don’t offer solutions that help you build a strong financial core. This is what makes us different. Only when you have built a strong financial core are you able to properly protect yourself from unexpected economic storms.

View more..

« Investing Won’t Make you Wealthy | Main | Financial Balance in a Nutshell »
Friday
Jul272012

Inflation or Deflation – What’s Next?

The fear of inflation is all over the financial news. It seems obvious that we are destined for hyper-inflation based on the fact that the Feds have been pumping up the economy using Quantitative Easing (QE) techniques.

QE means that a central bank buys financial assets as a means to inject a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to keep market interest rates at a specified target value. A central bank implements QE by purchasing financial assets from banks and other private sector businesses using new electronically created money. This action increases the excess reserves of the banks and raises the prices of the financial assets bought, which lowers their yield.

In essence the U.S., along with many other countries, has been injecting their economies with newly created money, whether physical or electronic in format. The fear is that QE may cause higher inflation than desired if the amount of easing required is overestimated, and too much money is created.

Here is an idea - During times of inflation it is critical to not lose core money, especially since the money you have is already losing purchasing power. You must have core money in safe money instruments with competitive and guaranteed rates of interest so that your money will be there when you need it.

Is hyperinflation really going to happen?  There are other important factors at work that you need to hear about. Consider Harry S. Dent’s research and new book called, The Great Crash Ahead.

HS Dent is an economic research and forecasting company that promotes the Dent Method of Economic Forecasting. The Dent Method, developed by company founder and economic expert Harry S. Dent, Jr. in the late 1980’s, is a long term economic forecasting technique based on the study of and changes in demographic trends and their impact on our economy. It works by showing how predictable consumer spending patterns combined with demographic trends allow us to forecast the economy years or even decades in advance. Check out his website at: www.hsdent.com

Dent’s conclusion is that we are headed toward a time of deflation. He has well researched justification for his position and he has published a book called, The Great Crash Ahead: Strategies for a World Turned Upside Down. I highly recommend checking out his research and reading his book before you decide if we are headed for inflation or deflation. You can get his book from Amazon.com.

Here is an idea - During times of deflation it is important to make sure your core money is safe, growing at a guaranteed interest rate, and available. As cost of goods and services drop your safe money savings and their guaranteed earnings increase in relative value. Not only is your money there when you need it, it will purchase more than it used to.

Either way having your core money properly placed into safe money instruments provides you the long term financial stability you need to weather inflation or deflation. The CORE Financial Group specializes in helping you properly allocate your core money into safe money instruments.

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>