Investing in Commodities

Not at the Chicago Mercantile Exchange, but in your pantry

If anybody brings up money and what to do with it , or how to prepare for possibly rougher times ahead, I suggest picking up some silver, and, if possible, pre-1964 silver coins. I’m not an investment counselor or a professional investment adviser, so **note** this blog should not be construed as professional investment advice. I’m just telling you what I would tell my adult children or my friends. If I had extra money I would look at silver charts, find a buy point, and pick some up.

But if you’re not up for that, or can’t afford to buy anything you can’t consume or use, you can still do a bit of investing. You can go to a warehouse food store and stock up on dry goods. A few bags of rice, flour, maybe some nuts, some sugar and the like might not be a bad idea. We’re doing a bit of this sort of investing partly because we live in a fairly high risk area for earth quakes. But these are times in which having a little food set aside is probably not a bad idea for just about everyone. Why?

I’m fairly sure you are aware of current gas prices. Ouch, huh? If you buy groceries you have probably noticed the higher gas prices reflected in the cost of your groceries.

The reason for the rise in prices is fairly simple. It’s called the “monetization of debt”. For quite a long time other countries have been buying the debt generated in the US. They have been buying this debt as investment. These days, for various reasons better addressed at another time, they no longer want to buy the debt of the US because the repayment seems less and less likely. Because other countries are not buying our debt, we must buy it ourselves. To do this we must print money. Guess what’s next. That’s right, inflation. When there is inflation your money is worth less. When your money is worth less the prices of commodities go up. Welcome to gas pump sticker shock ala April 2011.

What will happen next? I’m not going to predict that. If I had to hazard a guess I would say that things are likely to become worse before they become better.

Did you know that all Mormons are encouraged to store a year’s worth of food in case of an emergency? Right about now that sounds like a pretty good plan.