March 22, 2012
Last week Chairman Bernanke stated “inflation is not a problem”. I’m not sure about you, but I’ve never seen our President pumping gas or any of my Congressmen shopping at the local grocery store. The reality of the matter is things are getting worse and inflation is getting higher each and every day.
Consider the following discussion I had this morning with one of my clients, I will refer to him as “Mac”. Mac had been a successful owner/operator of 6 franchises of a nationally known restaurant chain specializing in breakfast. Mac’s restaurants currently employ around 120 people. Mac for the first time posted a loss of over 6 figures for fiscal year 2011. The main reason for this once profitable franchise’s decline is quite simple, inflation. Mac explains; “You don’t have to tell me about inflation, I’ve seen a dramatic increase in the price of food in the past 3 years. I saw the price for a case of bacon go from $29 to $57, case of coffee $52 to $114, eggs $11 to $18, bread $1.07 to $1.67, beef/lb $0.90 to $1.55. In addition, I had to lower my prices to compete with the dollar menus.”
Remember, these dramatic price increases are based on wholesale pricing, so I would imagine that they are even greater for you and I. Now Mac is considering completely giving up everything he has worked to build. Mac is what the American Dream was all about. Work hard, do things right and good things happen. Well, I’m afraid to say the American Dream is slipping away from us all: and so are another 120 jobs.
Savvy investor’s know the greatest hedge against inflation is gold and silver. The fact is gold and silver are the only “true” money the world has ever known. As of today, silver is almost 40% cheaper then the high of last year. If you could buy gas today for 40% less I bet you’d be in line filling up your tank. Take advantage of the low price of silver (and gold) to protect your self and your family from rising inflationary prices.
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