Good morning and welcome to The Speed of Money. This is your host, Jason Hartman, and today, I want to discuss the ultimate inflation shield. Forget all the drama of the Olympics. It’s inflation that has truly won the gold medal in 2008. Did you see the report out of Washington yesterday? The Labor Department reported that wholesale prices were up 1.2 percent in July alone. Just for a little historical perspective, that’s the fastest pace in 27 years. Don’t be deceived by the temporary micro trends. Inflation is here, folks, and it’s time you started profiting from it.
Here’s a real life example of how inflation has benefitted millions of people. In 1972, a dollar was worth a dollar. We understand that a dollar declines in value through inflation. Remember inflation, or the devaluation of the dollar, attacks our assets, such as our home equity, our stocks, our bonds, our mutual funds. But fortunately, it also diminishes the value of our debt. That is a wonderful thing.
In 1972, if someone bought the median price home and a dollar was worth a dollar. By 2001, that dollar had been destroyed in value and it was only worth $.24. This means a person who got a fixed-rate mortgage actually got paid to borrow money over the course of those 30 years.
We are in a historic time right now, an era of negative interest rates, where you can get paid to borrow money. Yes, you heard me right. If you would like to see this exact example in this chart, visit www.jasonhartman.com.
Next week, we’ll discuss the best type of inflation shielding assets, which create the most profitable debt benefit. Visit www.jasonhartman.com and join me next week, right here, on KABC 790 on The Speed of Money.
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Duration: 2 minutes