Inflation Risk is So Underpriced

I was sitting next to two female classmates in my senior year of high school at about 3 PM Israel time on a sort of field trip when one of them received a text message on her Nokia phone while she was playing Snake. It read: “Two twins killed in plane crash.” It was obviously the wrong interpretation of the news, since the reality was too far-fetched.

A quarter of an hour later, a swarm of teachers rushed into the tent we were sitting in, shouting at us that America was under attack and that we were instructed to go home immediately.

It was quite surreal to evacuate everyone so dramatically since all we were told is that there was a problem across the Atlantic Ocean in New York City.

11 years earlier, when I was just six years old, I was exposed to my first brush with bombings and Middle Eastern power struggles when the national TV station would shut down its broadcast and sirens would sound across the country, a sign that missiles were being launched by Saddam Hussein from Iraq aimed at Tel Aviv and other large cities in Israel.

The threat that those warheads contained unconventional weapons – mainly chemical, biological, or nuclear – meant that my 4-year-old brother, my mother, occasionally my father (who was serving in the reserves so he had military duties and wasn’t always home when sirens pierced through the airwaves), and myself rushed to the shelter built in the house we lived in wearing gas masks.

For hours on end, we would lock ourselves in this fortified room designed with thick cement walls, a heavy steel door, and duct-taped windows.

When 9/11 occurred, I was 17 and in the first week of my last year in high school, and I remember watching documentaries about the events created by “Truthers,” who were passionate about showing evidence that the official story doesn’t add up.

Because the person of interest was instantly presumed to be Osama Bin Laden, America went to war in Afghanistan, which offered shelter to Al-Qaeda, courtesy of the Taliban.

The country of Afghanistan borders Pakistan, Iran, Turkmenistan, Uzbekistan, and Tajikistan, and its climate is dry and sandy.

Once U.S. troops began patrolling its villages and rural landscape, they found out real quick what an I.E.D. was. They learned that because the surface is sandy and the Afghan forces, opposing (Taliban and others) were able to dig a shallow hole in the ground, fill it with an improvised explosive device, cover it with some sand, and water it to make it muddy, allowing the sun to dry it up within minutes, disguising it so well that soldiers would actually stand on top of it and still not be aware.

Could you even begin to imagine the tension and heart race of walking through an area where your next step could be your last? It takes hours just to traverse one mile.

The crash of 2008 has birthed an entire generation that lives that way, financially speaking. They believe the whole system can crash, tumbling down and resetting at any moment. This is also a difficult reality to box oneself into, yet many are preparing for.

We believe that a sovereign bond (credit) issued by governments is the biggest bubble on planet Earth since it assumes that governments cannot go broke.

We believe that a day will come when this debt will be rated differently, deemed riskier than at present, and we think interest rates will rise in turn. We do not think that this is an imminent threat, only an inevitable one.

Therefore, we choose to live full lives that aren’t dictated by fears but inspired by growth and wealth.

We are conscious of risk and we acknowledge the unsustainability of the current system but are not willing to pay hefty personal prices in advance of a potential crash that may or may not happen in our lifetime.

Instead, I decided to beef up my savings with over two years’ worth of living expenses stored in the form of physical precious metals. I keep adding to the stack with each major pullback.

We deal with things rather than deny their existence, but we refuse, under any circumstance, to be victimized by the system and become permanently paranoid. I won’t give anyone that much control over my fate!

Best Regards,

Lior Gantz
President, WealthResearchGroup.com