With inflation running so high in the early '80s, interest rates on even "boring" Treasury bonds were more than 10%....today interest rates on T bonds are only around 4%. Right now, inflation is --conservatively--running at 5%. And Ben Bernanke is flat out telling us there's more inflation to come...he said inflation seems likely to move temporarily higher in the near term---hmmm Yet somehow, T bonds pay just 4%. When you add it up you're actually losing a percent a year by holding treasuries now. Most of the time...gold doesn't do you much good in my portfolio. Since gold pays no interest institutional investors choose to park their money in high-yield bonds, where the interest more than covers the inflation rate--But now, putting your money in bonds doesn't even cover the rate of inflation. Sure makes gold look attractive...I'm averaging down...Won't go over 10% of my portfolio though...if you do--you are gambling and not well versed in assett allocation...after all--asset alocation is the most important investment decision you will make!!! Good Luck to All !!!!
So where are you parking the rest of your portfolio? (if you dont mind me asking) What kind of other stocks are you buying in order to profit from the current wave of inflation that you are alluding to?